World Applied Programming, Vol (3), Issue (8), August 2013.

375-383
ISSN: 2222-2510
2013 WAP journal. www.tijournals.com

Perceptions of Online Banking Users in

Bosnia and Herzegovina
Muhammed Krad zlen *

Dzan Jukic

Ishik University, Business and

Management Department, Erbil,
Iraq.
kursadozlen@yahoo.com

Faculty of Economics, International

Burch University, 71000, Sarajevo,
Bosnia and Herzegovina.
dzanjukic@gmail.com

Abstract: The objective of this work is to identify the perceptions of online banking users in Bosnia and
Herzegovina about its adoption, consequences and adoption related elements. Therefore, the data, gathered after
conducting a survey questionnaire on 183 online banking users, is analyzed descriptively. The results provided
high agreement level for each section in the survey, except low level for users self-efficacy in using online
banking.
Keywords: Online Banking, service quality, users self efficacy, perceived usefulness, perceived ease of use,
satisfaction, intention to use, individual benefits
I.

INTRODUCTION

As a result of enhancing technologies, institutions can provide huge range of products and services easier and more
responsively. Banking sector also globally has enhanced their services to provide clients at anytime and anywhere. They
have started these services by the use of automated telephone services and furthermore the use of Internet banking.
Therefore, the role of Information & Communications Technologies has been increasing in banking sector and the
implementation and use of online banking is becoming more popular.
Banks today are seeking to implement new technologies beside their existing systems in order to attract more customers.
While implementing the new systems and re-engineering the existing ones, they meet some important factors in order to
enhance their effectiveness. On the other hand, beside organization wide acceptance, the acceptance of implemented
systems through the customers becomes important. This study considers the issue from customers point of view and
therefore, aims to identify the perceptions of online banking users in Bosnia and Herzegovina about its adoption,
consequences and adoption related elements.
This study descriptively analyses the obtained data from 183 online banking users in Bosnia and Herzegovina. In the
next section, the relevant literature is reviewed. Third section includes the information about research methodology.
Fourth section presents the results and the paper is ended with the conclusion part.

II.

LITERATURE REVIEW

According to the relevant literature, modern internet banking is the leading force for new future developments. Keeton
(2001) [7] described the dramatic change, the growth and the fierce competition in the banking sector. Keeton (2001)
discusses how the information technologies and banking services have improved and how companies should adopt the
new ways of coordinating the resources to be survived in the market.
According to Moscato and Altschuller (2012) [8], the greatest problem about the online banking is security. Banks
should provide safe online platforms for their potential and existing customers in order to attract; earn their trust and
make profit from them. They suggest banks establishing security protocols to follow. They also provide some evidences
about constructing security concerns and how they vary in different regions.
Cracknell (2004) [2] discusses affording to go every day to the bank or paying a lot for a good protection in the online
banking. He also discusses online banking types and attractiveness of them and the effect of the environment on the
online banking decisions.

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Muhammed Krad zlen and Dzan Jukic, World Applied Programming, Vol (3), No (8), August 2013.

Furst, Lang and Nolle (2000) [4] describe the popularity of online banking in that time. They furthermore note that
online buying and selling has become quite normal in daily life and people trust the system. They suggest strong and
well structured regulations by the government for those systems require in preventing major problems.
Bahl (2012) [1] studies how the government deals with the online banking and how they set up rules to protect its
people, since even a small mistake can cause big problems. He suggests that government is not responsible to make
regulations because using online services is a voluntary issue.
Sarokolaei and Rahimipoor, Saraei and Vakilzadeh (2011) [11] suggest that every action charge its fees and these fees
are reduced through online banking as a result of their analysis in Iran. But, the numbers of clients and their transactions
have risen. They identified that banks use relatively low hidden fees that are hard to be recognized without registering
those fees and therefore not paying taxes on the achieved profit. They reported that the profit levels of Iranian Banks
have been increased by online banking.
Goldmann (2011) [5] explains how the cross border payments are regulated, how the economy grows and business limits
fall apart through online banking. For many international companies, he suggests that online banking is the only way to
collect money for their products/services. He also suggests the evolution of such programs and regulations of the laws by
protecting the buyer and seller in order to enhance companies success.
Hamadi (2010) [6] describes that Internet banking provides new possibilities for customers to buy and sell
internationally. If the perceived quality is high and the user achieve usefulness, users become more attracted to use the
same service again and so the trust with the online banking increases. According to his report, many field studies
identified that the satisfaction level is equal to the profit level.
Singh, Chhatwal, Yahyabhoy and Heng (2002) [12] explain the revised technology life cycle and the huge profit
gain/loss gained by new innovations in the banking system. They suggested revolutionizing banking technologies and
developing new technologies to have new customers and keep the existing ones.
Mukherjee and Nath (2008) [9] stressed on the trust issue by performing empirical analysis with five test hypotheses on
510 internet users in India just to see under which circumstances customers trust their banks. They identified a casual
relationship between trust and commitment.
Wungwanitchakorn (2002) [15] analysed customer and bank communication and the ways of successfully realizing it by
considering six main variables like relative advantage, opinion leadership, complexity, trialability, compatibility and
telephone banking usage in Thailand because this market has evolved with new technologies, new markets and foreign
investments.
Wang, Wang, Lin and Tang (2008) [14] reported that past research was about internet banking and related new
technologies but the customers are on the main focus now. They aim to identify the main factors of users acceptance by
analyzing the stages of acceptance through technology acceptance model (TAM).
Thulani, Tofara and Langton (2009) [13] describe the situation about internet banking in less developed countries and
present the problems about internet banking acceptance in Zimbabwe. Their results provide that it is possible to
implement internet banking but the new system is not adopted by many customers. They proposed developing plans to
create new technologies to gain more customers by the help of domestic central bank to attract more customers.
Diniz, Porto and Adachi (2005) [3] complain that it is hard to monitor and measure the digital environment for every
manager, researcher and developer. They suggest that it is necessary for the researchers to evaluate the functionality,
reliability and usability of internet banking in order to evaluate the needs of the customers.
Sarma and Singh (2010) [10] stress on the security issue of private data about the customers through cyber crime. They
suggest new technologies with lower costs for better protection. They also suggest implementation of new technologies
using biometric data such as eye-picture, finger-print, voice-recognition, etc. in order to reach more customers.

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Muhammed Krad zlen and Dzan Jukic, World Applied Programming, Vol (3), No (8), August 2013.

III.

RESEARCH METHODOLOGY

III.1. Scale development

The articles used while developing the survey items are provided in table 1.
Table 1. List of variables and sub-items

No

Variable
Name

Challenges in
internet
banking

Online banking
system quality

User selfefficacy

Perceived ease
of use

Usefulness of
online banking

Intention to use
online banking

Satisfaction

Online banking
effectiveness

Sub-items

References

Transformation of banking
Competition
Regulations
Benefits from customers
E-commerce activities
Segmentation
Offers
Treatments
Environment
National banking system
Challenges
Threats
Revenues
Cross border payments
Evolution of commerce
No limits for transactions
Customer commitment
Quality of services
Satisfaction levels
Profit levels
Technology
Innovation
ATM machines
Globalization
Trust
Mistakes
Relationships
Variables
Foreign investments
User acceptance
Focus on customers
Attention on customers
Banking solutions
Promotion
Profitability
Functionality
Reliability
Usability
Digital environment
authentication

377

Moscato and Altschuller (2012); Cracknell

(2004); Furst; Lang and Nolle (2000); Bahl
(2012); Sarokolaei; Rahimipoor; Saraei and
Vakilzadeh (2011) ; Goldmann (2011)
Moscato and Altschuller (2012); Cracknell
(2004); Furst; Lang and Nolle (2000); Bahl
(2012); Sarokolaei; Rahimipoor; Saraei and
Vakilzadeh (2011) ; Goldmann (2011)
Moscato and Altschuller (2012); Cracknell
(2004); Furst; Lang and Nolle (2000); Bahl
(2012); Sarokolaei; Rahimipoor; Saraei and
Vakilzadeh (2011) ; Goldmann (2011)
Moscato and Altschuller (2012); Cracknell
(2004); Furst; Lang and Nolle (2000); Bahl
(2012); Sarokolaei; Rahimipoor; Saraei and
Vakilzadeh (2011) ; Goldmann (2011)
Moscato and Altschuller (2012); Cracknell
(2004); Furst; Lang and Nolle (2000); Bahl
(2012); Sarokolaei; Rahimipoor; Saraei and
Vakilzadeh (2011) ; Goldmann (2011)
Moscato and Altschuller (2012); Cracknell
(2004); Furst; Lang and Nolle (2000); Bahl
(2012); Sarokolaei; Rahimipoor; Saraei and
Vakilzadeh (2011) ; Goldmann (2011)
Moscato and Altschuller (2012); Cracknell
(2004); Furst; Lang and Nolle (2000); Bahl
(2012); Sarokolaei; Rahimipoor; Saraei and
Vakilzadeh (2011) ; Goldmann (2011)
Moscato and Altschuller (2012); Cracknell
(2004); Furst; Lang and Nolle (2000); Bahl
(2012); Sarokolaei; Rahimipoor; Saraei and
Vakilzadeh (2011) ; Goldmann (2011)

Muhammed Krad zlen and Dzan Jukic, World Applied Programming, Vol (3), No (8), August 2013.

III.2. Variables & measuring items

This study considers nine variables which are identified as a result of the literature review about Internet Banking. The
survey consists of forty-seven questions. The variables are briefly explained below.
Challenges in online banking: Understanding and reaching the different types of digital customers; increased customer
loyalty through personalized products; consideration of the individual life situation of the individual customer; use of the
highest safety standards and credible mediation over the customers. The most dangerous challenge in online banking is
the competition which can determine the profitability ratio of a bank. Many customers mean good profit. Online banking
system quality refers to the quality of provided services by the system and the infrastructure such as design, security,
intensiveness for private information, quick transactions, etc. Self-efficacy is understood as subjective certainty of being
able to cope with new or difficult situations demand due to its own authority. These beliefs are ultimately the result of
appropriate experiences. Banks needs to create situations which their customers can handle. Perceived ease of use is
developed to determine whether internet banking is easy to use. Usefulness of online banking determines whether online
banking is useful for the users transactions. Intention to use online banking is designed to detect if the user has intention
to use online banking further. Satisfaction of users aim to identify how amount the users are satisfied with online
banking. Online banking effectiveness is designed to measure whether online banking is beneficial for the users.

III.3. Data and Methodology

Data was collected only from different locations but mostly from Bosnia and Herzegovina by designing the survey
online in order to quickly gather the data. The surveys link is sent via e-mail of social networks to potential participants.
183 survey forms are filled out online. The collected data is then inserted into an excel spreadsheet and analyzed
descriptively.
IV.

RESULTS

IV.1. Demographics
This survey is responded by 118 males and 65 females. Their education level is found to be high (With doctoral degree
21, master degree 45, undergraduate 103 which is bachelor and 21 other). The positions of the respondents are grouped
according to their similar characteristics. It is possible to conclude that most of the respondents have clerical positions in
their work places.
Table 2. Positions of the Respondents
Positions
CEO
Manager
Clerical Workers
Engineer
Academic

Number
35
42
95
10
1

Total

167

From table 3, it is observed that proposed challenges are well agreed by the respondents.
According to the results, it is observed that the respondents evaluate the system as highly qualified in terms of its design,
security, sensitivity for private information, allowing the flow of information, saving time, enhancing the interactivity
among the parties and working under lower levels of internet connections (Table 4).
The results identified that users are slightly self-effective on online banking usage in terms of having necessary
knowledge, experience, skills and equipment to use online banking (Table 5).
According to the responses, it is observed that the users are agree that online banking is easy to use including simplicity
of usage, easy to learn, accessible from anywhere anytime and quick (Table 6).

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Muhammed Krad zlen and Dzan Jukic, World Applied Programming, Vol (3), No (8), August 2013.

Table 3. Challenges in internet Banking

Challenges in Internet Banking (5.62)
Providing the security of online transactions
Earning the trust of customers
Behaviors of potential/poor customers
Changing technologies
Changing regulations
Changing banking policies
Profit from taxes
Hidden fees in transactions
Growth of economy
Increasing Cyber crime
Fear of customers
Education levels of customers

Mean
5.55
5.62
5.53
5.54
5.69
5.62
5.7
5.59
5.56
5.66
5.7
5.68

Std. Deviation
1.129
1.112
1.186
1.172
1.181
1.132
1.132
1.152
1.144
1.114
1.132
1.173

Mean
5.22
5.29
5.27
5.32
5.24
5.3
5.35

Std. Deviation
1.109
1.013
1.278
1.009
1.002
1.102
1.155

Mean
4.81
4.85
4.83
4.91

Std. Deviation
1.176
1.242
1.051
1.036

Mean
5.27
5.29
5.32
5.35
5.28

Std. Deviation
1.273
1.044
1.116
1.238
1.001

Table 4. Online Banking System Quality

Online Banking System Quality (5.28)
Design of the system is well done
The system satisfies necessary security in the transactions
The system is sensitive for private information
The system perfectly allows the flow of necessary information
The system saves time in the transactions
The system enhances the interactivity among the parties
The system can work with even low level of internet connections

Table 5. User Self-efficacy

User Self-efficacy (4.85)
I have necessary information about using online banking
I have necessary experience to use online banking
I have necessary skills to use online banking
I have necessary equipment to use online banking

Table 6. Perceived Ease of Use

Perceived Ease of Use (5.30)
Using online banking is very simple
Online banking is easy to use
Online banking is easy to learn how to use
Online banking is accessible from anywhere at anytime
Online banking is quick to make the transactions

It is observed from the results that users confidently say that the new banking system is useful for their current life style,
provides faster transactions, has lower costs and time efficient (Table 7).

Table 7. Usefulness of Online Banking

Usefulness of Online Banking (5.74)
Online banking is useful for people's current life style
Online banking provides faster transactions
The cost of using online banking is very low
I can save time by using online banking services

379

Mean
5.75
5.72
5.71
5.79

Std. Deviation
1.033
1.041
1.036
1.002

Muhammed Krad zlen and Dzan Jukic, World Applied Programming, Vol (3), No (8), August 2013.

It is identified from the results that the users prefer using online banking and have strong intention to use online banking
wherever/whenever possible (Table 8)
Table 8. Intention to Use online Banking
Intention to Use online Banking (5.78)
I seek to use online banking wherever/whenever possible
I prefer using online banking instead of other ways

Mean
5.80
5.77

Std. Deviation
1.183
1.045

The results reveal that online banking is well used by the respondents in order to make their transactions and track their
accounts (Table 9).
Table 9. Online Banking Usage
Online Banking Usage (5.45)
I use Online banking in order to make my transactions
I use Online banking in order to track my account

Mean
5.41
5.48

Std. Deviation
1.286
1.192

The respondents are identified to be very satisfied with the speed, quality, costs, efficiency, usage, reliability and
portability of online services (Table 10).
Table 10. Satisfaction
Satisfaction (5.33)
I am satisfied with the speed of Online banking services
I am satisfied with the quality of Online banking services
I am satisfied with the costs of Online banking services
I am satisfied with the efficiency of Online banking services
I am satisfied with the usage of Online banking services
I am satisfied with the reliability of Online banking services
I am satisfied with the Portability of Online banking services

Mean
5.33
5.29
5.35
5.36
5.31
5.31
5.37

Std. Deviation
1.037
1.325
1.075
1.105
1.255
1.018
1.182

Finally, it is identified that the users have gained high benefits by reducing time and costs in their transactions and
increasing the efficiency/effectiveness and reliability of their transactions (Table 11).
Table 11. Online Banking effectiveness on Individual performance
Online Banking effectiveness on Individual performance (5.57)
I have reduced the time for my transactions
I have reduced the costs for my transactions
The efficiency/effectiveness of my transactions has improved
I have increased the reliability of my transactions

V.

Mean
5.58
5.61
5.53
5.55

Std. Deviation
1.197
1.124
1.241
1.099

CONCLUSION

The results suggested moderate agreement in general with this research except user self-efficacy which has the lowest
mean value. The users consider themselves weakly capable of using online banking services. However, they perceive
that the developed online systems are highly qualified and using them is easy and useful, have intention to use the
system, are using the system, are satisfied with the system and feel that they have gained benefits.

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Muhammed Krad zlen and Dzan Jukic, World Applied Programming, Vol (3), No (8), August 2013.

Table 12. Overall Variables

Measures
Challenges in Internet Banking
Online Banking System Quality
User Self-efficacy
Perceived Ease of Use
Usefulness of Online Banking
Intention to Use online Banking
Online Banking Usage
Satisfaction
Individual performance

Mean
5.62
5.28
4.85
5.3
5.74
5.78
5.45
5.33
5.57

Total

5.44

According to the results, it can be concluded that online banking in Bosnia and Herzegovina is well adopted and
beneficial despite struggling with economic crises and different problems. However, the users rated themselves as
slightly capable of using online banking. Banks through customer training programs and services can enhance their
capability and therefore the usage of their online services. This research has approached to the adoption issue from the
users perspective in general. It hasnt differentiated the respondents. Future research may consider it from the banks or a
specific groups perspectives.
REFERENCE
[1]
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]

[13]
[14]
[15]

Bahl, S. (2012). E-Banking: Challenges & Policy Implications. International Journal of Computing & Business Research,
Cracknell, D. (2004). Electronic banking for the poor panacea, potential and pitfalls. Small Enterprise Development, 15(4), 8
24.
Diniz, E., Porto, R. M., & Adachi, T. (2005). Internet banking in Brazil: evaluation of functionality, reliability and usability.
The Electronic Journal of Information Systems Evaluation, 8(1), 4150.
Furst, K., Lang, W., & Nolle, D. (2000). Who offers Internet banking? Quarterly Journal, Office of the Comptroller of the
Currency, 19(2), 27.
Goldmann, N. (2011). Effectiveness of Cross-Border Corporate Payments. Journal of Internet Banking and Commerce, 16(1),
1-3.
Hamadi, C. (2010). The Impact of Quality of Online Banking on Customer Commitment. Communications of the IBIMA, 18.
doi:10.5171/2010.844230
Keeton, W. R. (2001). The transformation of banking and its impact on consumers and small businesses. Economic ReviewFederal Reserve Bank of Kansas City, 86(1), 2554.
Moscato, D.R. and Altschuller, S. (2012). International Perceptions of Online Banking Security Concerns. International
Perceptions of Online Banking Security Concerns, 12(3), 51-64.
Mukherjee, A., & Nath, P. (2003). A model of trust in online relationship banking. International Journal of Bank Marketing,
21(1), 515.
Sarma, G., & Singh, P. K. (2010). Internet Banking: Risk Analysis and Applicability of Biometric Technology for
Authentication. International Journal of Pure and Applied Sciences and Technology, 1(2), 6778.
Sarokolaei, M. A., Rahimipoor, A., Saraei, S. & Vakilzadeh, Z. (2011). Investigating of the effect of E-Banking on Increasing
of Bank revenues (Case Study: Iranian Private Banks). Retrieved from http://www.wbiconpro.com/606-Mehdi.pdf
Singh, S., Chhatwal, S. S., Yahyabhoy, T. M., & Heng, Y. C. (2002). Dynamics of innovation in E-banking. In 10th European
Conference
on
Information
Systems,
Gdansk,
Poland,
University
of
Gdansk.
Retrieved
from
http://ifiptc8.org/asp/aspecis/20020136.pdf
Thulani, D., Tofara, C., and Langton, R. (2009). Adoption and Use of Internet Banking in Zimbabwe: An Exploratory Study.
Journal of Internet Banking and Commerce, 14(1), 1-13.
Wang, Y.-S., Wang, Y.-M., Lin, H.-H., & Tang, T.-I. (2003). Determinants of user acceptance of internet banking: an
empirical study. International Journal of Service Industry Management, 14(5), 501519.
Wungwanitchakorn, A. (2002). Adoption intention of banks customers on Internet banking service. ABAC Journal, 22(3),
6380.

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Muhammed Krad zlen and Dzan Jukic, World Applied Programming, Vol (3), No (8), August 2013.

APPENDIX
ONLINE BANKING SURVEY

Please answer all questions

For each numeric question, circle the number that best reflects your opinion of the factor judged 1=strongly disagree,
2=disagree, 3=slightly disagree, 4=neither, 5=slightly agree, 6=agree, 7=strongly agree
Circle only one number for each scale

Demographics
Your department/unit:

Your current position/role in dept/unit:

c
d

How long have you been in current position/role?:

Your highest education level: Doctorate Master
Gender:

e
f

Age:

30

Male
31-40

Undergraduate

Other______

Female
41-50

51-60

61

Please indicate your level of agreement about the following Challenges in Internet
Banking
Providing the security of online transactions
a

Disagree

1 2 3 4 5 6 7

a
b
c
d
e
f
g

Earning the trust of customers

Behaviours of potential/poor customers
Changing technologies
Changing regulations
Changing banking policies
Profit from taxes
Hidden fees in transactions
Growth of economy
Increasing Cyber crime
Fear of customers
Education levels of customers
Online Banking System Quality
Design of the system is well done
The system satisfies necessary security in the transactions
The system is sensitive for private information
The system perfectly allows the flow of necessary information
The system saves time in the transactions
The system enhances the interactivity among the parties
The system can work with even low level of internet connections

1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
Disagree
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3

a
b
c
d

User Self-efficacy
I have necessary information about using online banking
I have necessary experience to use online banking
I have necessary skills to use online banking
I have necessary equipment to use online banking

a
b
c
d
e

Perceived Ease of Use

Using online banking is very simple
Online banking is easy to use
Online banking is easy to learn how to use
Online banking is accessible from anywhere at anytime
Online banking is quick to make the transactions

b
c
d
e
f
g
h
i
j
k
l

382

Agree

4
4
4
4
4
4
4
4
4
4
4

5
5
5
5
5
5
5
5
5
5
5

4
4
4
4
4
4
4

5
5
5
5
5
5
5

6 7
6 7
6 7
6 7
6 7
6 7
6 7
6 7
6 7
6 7
6 7
Agree
6 7
6 7
6 7
6 7
6 7
6 7
6 7

Disagree
1 2 3
1 2 3
1 2 3
1 2 3

4
4
4
4

5
5
5
5

Agree
6 7
6 7
6 7
6 7

Disagree
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3

4
4
4
4
4

5
5
5
5
5

Agree
6 7
6 7
6 7
6 7
6 7

Muhammed Krad zlen and Dzan Jukic, World Applied Programming, Vol (3), No (8), August 2013.

a
b
c
d

Usefulness of Online Banking

Online banking is useful for people's current life style
Online banking provides faster transactions
The cost of using online banking is very low
I can save time by using online banking services

a
b

Intention to Use online Banking

I seek to use online banking wherever/whenever possible
I prefer using online banking instead of other ways

Disagree
Agree
1 2 3 4 5 6 7
1 2 3 4 5 6 7

a
b

Online Banking Usage

I use Online banking in order to make my transactions
I use Online banking in order to track my account

Disagree
Agree
1 2 3 4 5 6 7
1 2 3 4 5 6 7

a
b
c
d
e
f
g

Satisfaction
I am satisfied with the speed of Online banking services
I am satisfied with the quality of Online banking services
I am satisfied with the costs of Online banking services
I am satisfied with the efficiency of Online banking services
I am satisfied with the usage of Online banking services
I am satisfied with the reliability of Online banking services
I am satisfied with the Portability of Online banking services

Disagree
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3

4
4
4
4
4
4
4

5
5
5
5
5
5
5

Agree
6 7
6 7
6 7
6 7
6 7
6 7
6 7

a
b
c
d

Online Banking effectiveness on Individual performance

I have reduced the time for my transactions
I have reduced the costs for my transactions
The efficiency/effectiveness of my transactions has improved
I have increased the reliability of my transactions

Disagree
1 2 3
1 2 3
1 2 3
1 2 3

4
4
4
4

5
5
5
5

Agree
6 7
6 7
6 7
6 7

Part II: Please add here any positive /negative comments regarding the issue

Online survey links:

h t t p s :/ / www. e s u r v e y cr e a t o r .c o m / s / f d 2 5 a ce
h t t p s :/ / www. e s u r v e y cr e a t o r .c o m / s / 2 2 2 a 7 3 1

383

Disagree
1 2 3
1 2 3
1 2 3
1 2 3

4
4
4
4

5
5
5
5

Agree
6 7
6 7
6 7
6 7