Table of Contents

Introduction. 3

1. Introduction. 3

2. Rationale for the study or Problem statement 4

3. Research Questions. 4

4. Research Aims and Objectives. 5

5. Company Profile. 5

Literature Review.. 6

A. Conceptual Review.. 6

Research review.. 6

Variables and framework. 6

Research Methodology. 7

A. Research Design: 7

B. Data Design: 8

C. Sampling Design: 8

D. Questionnaire Design. 8

E. Data Analysis Design: 9

F. Time Plan and Budget 9

References

The Impact of Digitalization on Banking Industry in Oman

Introduction

1. Introduction of the Impact of Digitalization on Banking Industry in Oman

Due to the growing popularity of internet usage, the concept of electronic banking has been introduced in 90s. The world’s first ATM came into existence in 1967 by Barclays in in north London. Then in 1995, financial services were introduced by Wells Fargo financial services company that made online transaction into existence for the benefits of customers. (Michal Polasik, 2009). All around the globe, banking and financial sector has been going through several changes that are way too advanced in nature and customers are really getting benefited from those services. And it is due the development of new technological systems which are allowing customers to use new and advanced methods for their own ease at home and to enjoy banking facilities from home. (Sathye, 1999).

There are many different and advanced forms of banking services that have been introduced in the banking sector due to the modernization of digital age such as ATM, debit and credit card, internet banking, e-billing, mobile banking, electronic fund transfer, tele-banking, online payments, emails etc are yet the most prominent advances as per digitalization and these services are also considered to be cheapest modes of banking that too at ease as compared to physical branches and these are easy banking operations (Zheng, 2010)

Digital banking means the procedures of banking run through and delivered through electronic mode behind which the main aim is to serve customers as well as the banks via technological systems to provide comfort and convenience to both sides by giving faster and better experience than normal or traditional banking. (Adapa, 2011) It is an operational mechanism which is a vibrant mode of access where banks can easily add value to their customers and also provide them with benefits in terms of banking procedures and relevant products and services. Digitalization is not just a critical success but a big adoption by banking sectors especially these days where the need to improve is highly required and customers appreciate the end-to-end integration for both internal and external services. (Ananda, 2017).

This is the reason that banks all around the globe are moving towards digital technologies just to reduce their costs and risks as well as to speed up their transactions while also enhancing their service quality with customized services that also improved competition in the market. Digital banking allows customers to enjoy easy access to banking services without having them to physically visit the banks (Sujeet Kumar Sharmaa, 2018).

2. Rationale for the study or Problem statement

In 2008, many banks faced considerable jolts in their capital and long-term debt systems. These substantial shocked triggered the need of bringing changes in the banking system and changed regulations in the financial sector. Since then, banking system tried to emerge from backward systems to sustain successful measures and highly profitable transactions especially with captive and weak customers on basis of mortgage. But during all these crises and times, customers were introduced to highly technological smart phones and they started using those digital gadgets to an un-considerable extent as they feel comfortable using smart-phones and tabs anywhere and anytime. Meanwhile, traditional banking started to survive hardly as customer behaviour has have totally changed due to new technologies and their need towards banking requirements have also changed and they want the banking system to go in flow with the technologies that they are using  (Fu, 2006)

The purpose of bank is to provide effective service to its customers and not to redress the situations. Customer behaviour continued to change during all the stages of modern introductions of banking systems like internet banking, mobile wallets which means paying bills through mobiles, mass adoption of mobile devices, telephones being used as the channel for day-to-day banking transactions, hence, each and everything modernized is a bank in itself (Davis, 1989).

Now, customers have control to the balance of their accounts as they can check their remaining credits anywhere anytime, everyone is a bank. Our aim is to measure impact of digitalization on banking. Whereas, banking system does have the ability to change its destiny by taking necessary steps to get closer to its customers by adopting the means of digitalization and new technological innovations. The digitalization of banking will allow customers to have safe, secure and faster ways of carrying out their banking needs and these new technologies will also help the banking system in future to expand its services more efficiently and effectively (Davis, 1989). 

3. Research Questions of the Impact of Digitalization on Banking Industry in Oman

The emergence of advanced technology ultimately leading to digital technology having vast uses in all fields of life has led customers to demand technology swiftly for acquisition and utilization in all sectors all around the globe. This great advancement in Internet has caused an unusual increase in digitalization, globalization and economic liberalization. Thus, the adoption of digitalization in banks has been a common topic with emerging technology whose adoption will help banks in reaching to potential customers all across the globe and not just in the city it’s currently being operated (Bhaskaran, n.d.)

1.      This study focus on the growing digitalization in the banking sector, especially in Oman, as banks are the most important pillars of economic development of a country. What greater development will automatically increase the need of more advanced banking system with wider and sophisticated range of service?

2.       In Oman, more efforts are needed to improve digitalization in banking sector as they are under pressure from their main competitors leading the banks to find more new ways of reducing costs required for digitalization and improve performance simultaneously. This highlights the basic research objective based on a research question; ‘what are the impacts of digitalization in the banking sector in Oman?’ (Alraja, 2015.)

3.      Research Aims and Objectives of the Impact of Digitalization on Banking Industry in Oman

Our aim is to measure the ways that can achieve a significant impact of digitalization, it has to be widely adopted in the banking sector improve and contribute towards the economic and social scale of the country. As such, these technological advancements have also to be widely used by individuals and customers or bank users as well as economic enterprises and societies that are embedded in processes of delivering goods and services especially like e-Commerce) and are mainly relying upon to deliver public administrative services for the common cause of benefiting the locals of a nation, for example, the Omani people (Taylor, 1995).

Beyond just the development and deployment of advanced technological networks, customers and the local users are not readily paced to adopt a technology immediately. Mass adoption of digitalized products starts to appear once the advancement of the technologies mature and access to those technologies become affordable. This is frequently hastened by mandates for over-all network sharing in banks and their deployment of substitute platforms or the sale of spectrum digital gadgets. Hence, the main aim and objective is to highlight the various and advanced technological innovations in the banking sector in Oman and also at international level banks (Pikkarainen, 2004).

5. Company Profile of the Impact of Digitalization on Banking Industry in Oman

In Oman, the Central bank of Oman regulates and licenses the local banking sector, notes, issues development bonds, and monitors interest rates. Some other operational banks in Oman includes Bank Muscat, National bank of Oman, Bank Dhofar, Oman Arab Bank, Ahli Bank, Bank Nizwa, and Bank Sohar (Sathye, 1999).

Literature Review of the Impact of Digitalization on Banking Industry in Oman

A. Conceptual Review

There were numerous studies conducted to investigate the various factors that influence the adoption of digitalization in banking sector, all across the globe. The most widely used technology so far has been The Technology Adoption model and it accurately examines the use and determinants of information technology that has been accepted by the users. And it is valid for the usage of technology. As per this model, perceived usefulness and perceived ease are the factors that determine the adoption of computer technology. Therefore, the study showed extent of digital banking in perspectives of technology adoption model (Yi-Shun Wang, 2003).

Research review of the Impact of Digitalization on Banking Industry in Oman

Different factors influence customers to adopt digitalized banking services and the researchers indicated that there might be a lack in delivery channels of these technological services as they might be lacking the ability to meet customer demands by not making them aware about the installation of digitalized modes at your bank branch and not keeping the technology up-to-date. A study was conducted to analyze the critical factors that influence e-banking adoption and it was found that the main factors behind adoption are customer’s attitude, intention, behavioural control, trust, perceived usefulness and ease. (Sankari, 2015)

Davis in his technology acceptance model analyzed that the most effective factor among other adoption factors is perceived usefulness as there might be significant relationship between usage of mobile banking and its attitude and perceived usefulness. A customer will only go for a technology if he would find it valuable for him or his personal use. Whereas, perceived usefulness is an important and very popular factor in internet banking literature. (Guriting P., 2006). Perceived usefulness is the most influential factor among other factors towards intention to use internet. Whereas, another study evaluated that perceived ease has more influential impact on the intention to use internet banking. While several studies predict that perceived ease has a direct relationship with perceived usefulness (Gounaris, 2008).

Variables and framework of the Impact of Digitalization on Banking Industry in Oman

People started to show some security concerns which acted as a major resistance towards usage of mobile banking services. While, other studies predict that internet banking is far safe and gives the client security of their assets and valuables as in it reduces the need to carry large amounts of cash. Many recent studies have also indicated that other than perceived usefulness and ease, trust is also a prominent factor in service delivery channel. Awareness to security leads to trust and this trust leads to the usage of online banking services (Amola, 2016).

Banks should improve their screen designs of their online login apps for more integrated and navigated banking system and to make the overall appearance of the website appealing and easy to use for customers. Kumbhar examined the cost effectiveness in installing ATM service and the core service quality which directly affects the customer’s satisfaction provided by banks. The transaction fee has been an issue that had affected the customers in the past but after the invasion of digital banking, customers are not worries about such costs and they feel more comfortable in using online services as it doesn’t involve any hidden charges as well and they can have access to their count from any place in the world. The ease to access of their accounts has a benefiting role and that ensures the customer satisfaction in the e-banking sector (Kumbhar, 2011).

Research Methodology of the Impact of Digitalization on Banking Industry in Oman

Research methodology defines the specific procedures and techniques that can be used to identify, process, select and then analyze the information about the selected topic such as impact of digitalization on banking industry of Oman. The methodology section here, allows to have critical evaluation of overall reliability and validity of the research. (Sujeet Kumar Sharmaa, 2018).

A. Research Design of the Impact of Digitalization on Banking Industry in Oman:

A research design is a studious inquiry or examination especially an investigation or experimentation aimed at the discovery and interpretation of facts, revision of accepted theories or laws in the light of new facts, or practical application of such new or revised theories or laws. The study will adopt a descriptive research design and in order to assess and diminish the negative effect of common usage bias produced by factors such as the same context and usage, it conducts tests to assess the potential effectiveness of digitalization. All of the measurement of constructs and control variables are to be subjected to a principal component analysis to see how many customers adopt internet banking in their lives and there orthogonal components will emerge to explain the variance and reliability of the data.

B. Data Design of the Impact of Digitalization on Banking Industry in Oman:

Data design is the first design activity, which results in less complex, modular and efficient program structure. The information domain model developed during analysis phase is transformed into data structures needed for implementing the software. (Thakur, n.d.)

The study will be using a cross sectional data design along with a quantitative approach. According to the previous studies, a closed item self-administered and structured questionnaire will be used as a survey instrument in order to collect responses from retail and online banking customers. The questionnaire will have demographic profiles of the respondents and also the statements related to adoption of digital banking and the satisfaction it provides to the users in Oman. All the questions of the survey will be measured using a seven point Likert scale where 1 = strongly disagree, 2 = disagree, 3 = somewhat disagree, 4 = neither agree nor disagree, 5 = somewhat agree, 6 = agree and 7 = strongly agree. And according to previous studies, there are six principal dimensions upon which adoption of online banking in the perspective of retail banking customers will be used.

C. Sampling Design of the Impact of Digitalization on Banking Industry in Oman:

A sample design is the framework, or road map, that serves as the basis for the selection of a survey sample and affects many other important aspects of a survey as well. In a broad context, survey researchers are interested in obtaining some type of information through a survey for some population, or universe, of interest. (Lavrakas, 2008)

The sample will be obtained from the population of online and retail banking customers across the banks of Oman and the sample frame to be used will definitely be the digital banking users. Such specified customers will be identified using snowball sampling technique while data will be obtained through digital banking services among retail banking customers. To add more transparency to the study, only those employees will be catered who are most knowledgeable about electronic business and will be eligible for the questionnaire and those who lack in knowledge will be considered ineligible to fill the questionnaire.

D. Questionnaire Design of the Impact of Digitalization on Banking Industry in Oman

Different questions are considered to be answered by the employees of banks.

E. Data Analysis Design of the Impact of Digitalization on Banking Industry in Oman:

Data analysis is defined as a process of cleaning, transforming, and modelling data to discover useful information for business decision-making. (Guru, 2020)

Different descriptive analysis will be used like mean, number of respondents and standard deviation in particular to calculate the factors. The data will be analysed by finding the mean values of different factors affecting the digitalization. For that purpose, factor analysis will be applied to measure perceived factors in online banking and the fact of satisfaction by which people tend to adopt digital banking. Varimax roation analysis will be used to measure the six dimensions of factor analysis and then reliability test will be run using Cronbach alpha which will test the internal consistency of all the constructs to be used in the study.

Banking Index of the Impact of Digitalization on Banking Industry in Oman

https://assets.kpmg/content/dam/kpmg/om/pdf/oman-banking-perspectives.pdf

https://assets.kpmg/content/dam/kpmg/om/pdf/oman-banking-perspectives.pdf

https://assets.kpmg/content/dam/kpmg/om/pdf/oman-banking-perspectives.pdf

https://assets.kpmg/content/dam/kpmg/om/pdf/oman-banking-perspectives.pdf

F. Time Plan and Budget of the Impact of Digitalization on Banking Industry in Oman

The whole research project is low cost and time efficient process. The findings about the suggestive digital transformation is capable to reduce the operational cost and improve efficiency, regulatory controls and collaborative opportunities.

Budget
Transportation cost	$500
Thesis cost	$800
Questionnaire printing	$300
Paper and other accessories	$1500

Time plan

Literature review	2 months
Questionnaire filling	2 months
Data collection	1 month
Data analysis	1 month
Conclusion	1 month