AN ASSESSMENT OF THE FACTORS INFLUENCING THE ADOPTION OF  DIGITAL BANKING AMONG HOSPITALITY COMPANIES IN CAMEROON

CHAPTER ONE

INTRODUCTION

Background of the Study

With the rapid advancement of technology, all business systems must stay current with these developments. In executing various business activities, companies are required to enhance their performance through the use of technology and information. Information technology has become fundamental for businesses to operate effectively, offering competitive advantages to both individuals and companies, including those in the hospitality sector. However, leveraging this vast potential, banks are broadening their service reach by introducing e-banking and mobile banking. Customers can effortlessly make payments, transfer funds, and withdraw cash with a simple touch, utilizing the internet and mobile devices  (Amelia, 2017). This innovation has been well received by the public specifically the hospitality sector. According to the Financial Services Authority (OJK), the number of e-banking users surged by 270%, from 13.6 million customers in 2012 to 50.4 million in 2016. In terms of transaction frequency, the growth was 169%, with transactions increasing from 150.8 million in 2012 to 405.4 million in 2016 (Bhatt, 2018). Furthermore, these developments have shifted consumer expectations, making traditional banking services insufficient. As a result, banks and companies must adopt new business strategies to enhance service quality and improve operational efficiency. The evolution of banking has now progressed towards the implementation of digital banking services. Similarly, according to (Ahmed, 2018) the development and acceptance of digital banking as the new standard for commerce can reduce the cost of conducting banking transactions. It is user friendly, cheaper, offers flexibility of time and space, has better customer services and offers a variety of services (Turban et al., 2018; Nazaritehrani & Mashali 2020). All such benefits can facilitate customers’ online banking experience. On the other hand, with the advent of digital banking, the banking industry is advancing its systems, strategies, and functions to demonstrate to the public that technology can simplify customer transactions. This move aims to enhance customer transaction behavior. However, the implementation of these systems does not always guarantee success. Santoso (2018) identifies four factors to measure the success of information systems: user behavior, system usage, decision performance, and organizational performance. Nevertheless, success in implementing digital banking systems can be evaluated through user behavior, particularly customer interactions. Despite the potential benefits, digital banking services have not yet gained widespread acceptance among the public. Many banking customers remain skeptical and perceive digital banking as unsafe. The phenomenon observed in this study is that, despite the convenience offered by digital banking, its adoption by the hospitality sector is still minimal. Therefore, a survey will be conducted in order to assess the factors influencing the adoption of  digital banking among hospitality companies in Cameroon.

Statement of the Problem

When customers trust the performance of a digital banking service system, they are more likely to continue using it and eventually adopt the system fully. Those who already trust digital banking services will continue to monitor the security measures provided by banks. In addition, security is a crucial benchmark for customers concerning digital transactions. Currently, the primary issue in conducting transactions through digital banking services among hospitality sector customers is the system's security due to the rise in fraud incidents accompanying the development of digital banking services. Another significant concern is the public's perception of the risks associated with digital banking transactions. Furthermore, several studies conducted in various regions have yielded differing results. Yudha and Isgiyarta (2015) found that trust has a positive and significant influence on the acceptance of cigital banking. Similarly, research by Sohrabi et al. (2018), which identifies factors influencing online banking adoption in Malaysia, states that trust levels impact the adoption of online banking. On the other hand, Supriyadi's (2014) research showed that the perception of risk in digital banking transactions positively and significantly influences customers' repeated interest in using internet banking. This finding aligns with Kallanmarthodi and Vaithiyanathan's (2017) research, which found that risk perception positively and significantly affects the intention to adopt electronic banking. However, these results differ from those of Yudha and Isgiyarta, who found that risk perception does not positively influence internet banking acceptance but rather negatively affects its use. Hence, it is in the light of these that the study seeks to assess the factors influencing the adoption of digital banking among hospitality companies in Cameroon.

 1.3  Objectives of the Study

The main purpose of this study is to assess the factors influencing the adoption of  digital banking among hospitality companies in Cameroon. Specifically, the study will;

Evaluate the effectiveness of training programs aimed at promoting digital banking adoption among hospitality companies.

Investigate the factors influencing the adoption of  digital banking among hospitality companies in Cameroon.

Investigate the impact of environmental factors on the adoption of digital banking in the hospitality sector.

 Evaluate the barriers to digital banking adoption by hospitality companies in Cameroon.

1.4  Research Questions

The following questions have been prepared for the study:

How effective are the training programs aimed at promoting digital banking adoption among hospitality companies?

What are the factors influencing the adoption of digital banking among hospitality companies in Cameroon?

What is the impact of environmental factors on the adoption of digital banking in the hospitality sector?

What are the barriers hindering the adoption of digital banking by hospitality companies in Cameroon?

1.5 Research Hypotheses

H0: There are no significant factors influencing the adoption of digital banking among hospitality companies in Cameroon.

Ha: There are significant factors influencing the adoption of digital banking among hospitality companies in Cameroon.

1.6 Significance of the Study

The study will provide insights into how to enhance the adoption of digital banking services within the hospitality sector Additionally, hospitality companies in Cameroon will benefit from the study findings as it will help them understand how digital banking can streamline their financial operations, improve payment processing, and enhance customer service. Moreover, subsequent researchers will use it as a literature review. This means that other students who may decide to conduct studies in this area will have the opportunity to use this study as available literature that can be subjected to critical review. Invariably, the result of the study contributes immensely to the body of academic knowledge with regard to the factors influencing the adoption of  digital banking among hospitality companies in Cameroon.

1.6 Scope of the study   

The scope of this study is boarded on the factors influencing the adoption of  digital banking among hospitality companies in Cameroon. Empirically, this study will evaluate the effectiveness of training programs aimed at promoting digital banking adoption,investigate the factors influencing the adoption of  digital banking, the impact of environmental factors on the adoption of digital banking in the hospitality sector and evaluate the barriers to digital banking adoption by hospitality companies in Cameroon.

Geographically, the study will be delimited to employees of some selected hospitality companies in Douala, Cameroon.

1.7 Limitation of the study

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other schools, local governments, states, and other countries in the world.

 1.9 Definition of Terms

Digital banking: refers to the use of electronic platforms and technologies to provide banking services.

Mobile banking: is the use of a mobile application provided by a financial institution that allows customers to perform various banking transactions through their smartphones or tablets.

Internet banking: also known as online banking, involves conducting banking transactions through a web-based platform provided by a financial institution.