The Factors That Affect Usage of Mobile Banking in Saudi Arabia

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Pousttchi and Schurig define mobile banking as” type of execution of financial services in the course of which – within an electronic procedure – the customer uses mobile communication techniques in conjunction with mobile devices” (Pousttchi and Schurig 184). On the other hand, other authors have defined mobile banking as “a channel whereby the customer interacts with a bank via a mobile device, such as a mobile phone or personal digital assistant” (Barnes and Corbitt 274). Currently, customers are in a position to oversee accounts transactions and check balances thanks to mobile banking services. In addition, the service has also enabled individuals to transfer funds from one account to another; pay invoices make order transactions, and monitor credit cards use. An increasing number of customers are finding it convenient to use mobile banking services in place of the conventional banking services.

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This research paper intends to examine the factors that affect usage of mobile banking in Saudi Arabia. For banks intent on improving the rates of usage of mobile banking services, there is a need to understand thoroughly the factors affecting the resistance and adoption of mobile banking. It is important that banks acknowledge and embrace those barriers that consumers facing them in their quest to adopt mobile banking, if at all the financial institutions are to realize success in as far as this channel of banking is concerned. For this reason, the basis of this research paper is the secondary data available on the challenges that faces banks in Saudi Arabia, as they try to implement mobile banking services.

Literature review

The internet has been very instrumental in helping revolutionalize various industries and more so those in the service sector. As a result, many financial services have invested in information communication technology (ICT) to enhance their mode of conducting business, in the process empowering such businesses, and increasing the ability of customers to access better services. New players have also emerged in the financial services sectors and these includes amongst others, online banks (Barnes and Corbitt 276). The wireless and mobile market has witnessed a rapid rate of growth, in recent years. Celent, a financial consultancy firm, carried out a study whose results reveled that by the year 2010, 35 percent of the households that are currently involved in online banking will have embraced mobile banking. This shall be an increase of 34 percent, from the current 1 percent. Such Asian countries as Bangladesh, India, Indonesia, China, and Philippines, have already established a solid infrastructure for the mobile phone industry. A majority of the European countries enjoy a very high penetration rate for mobile phone use. In these countries, the apple for mobile banking is high.

Mobile banking challenges

There are several challenges that hinder the embracing of mobile banking solution.

Reliability and scalability

One of the challenge facing banks is that of upgrading their existing infrastructure to embrace mobile banking to cater for their customer that appears to grow exponentially. Mobile banking enables customers to access this service every hours of the day. In addition, once customers discover how useful mobile banking can be, they will also increase their expectations for the service (Barnes and Corbitt 281). It is important therefore that the banks offering mobile banking services invest in research and development into this area, to give customers quality services.


Security is major concerned in as far as online transactions are concerned, and mobile banking systems are not an exception. Apart from the fact that the customer maybe already faced with the challenges of a complex transaction, there is also the issue of trust. Therefore, it is important that all the stakeholders that are involved on the provision of mobile banking services collaborate to mitigate security concerns regarding this activity. Towards this end, the parties involved in the provision of mobile phone banking services needs to address a number of issues; if at all offering of financial transactions executed over the wireless network is to occur in a secure infrastructure (Pousttchi and Schurig 185). Throe is a need therefore to emphasize on the importance of the physical security issue regarding mobile phone devices. This is especially the case in instances where the physical security comes in the form of a smart card. It is also important to ensure the addressing of security issue of the thick-client application that a mobile phone supports. Should such a hacker come across such a device, they will be required to have a Password or password, before they can use it to access the mobile banking application. Accordingly, the authentication of the user password or personal identification number is important. The data that is transmitted need also an encryption, as well as that data stored in such a device.

Handset operability

Given that various mobile phone devices exist in the market, this is already a big challenge for those banks that are intent on offering their customers mobile banking solutions. For example, whereas there are those devices that can support short messaging services (SMS) only, others however have additional features, such as WAP browser and J2ME. Nonetheless, it is possible to localize initial interoperability issues. For example, in India, the mobile banking industry has embraced such portals as R-World. This device allows mobile banking customers with phones whose low need is java based to access this service (Barnes and Corbitt 281). On the other hand, in South Africa, the telecommunication industry, in collaboration with the banking sector, have made it possible for mobile phone users to access mobile banking services using any type of a phone, because this service has been defaulted to a technology known as USSD.

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Banking institutions are largely responsible for ensuring the effectiveness of handset inoperability. Accordingly, financial institutions the applications installed in mobile phones to enable mobile banking services (whether these are native, or java-based) are user-friendly, offer better security, and enable for the development of capabilities that are complex, yet related to those used in internet banking. Although pone can access the basic service of mobile banking, using SMS services, such as enquiring on the available balance in their account, however, this service cannot accomplish other complex transactions. Security issue is another challenge that faces mobile banking (Barnes and Corbitt 283). This is because in certain instances the execution of mobile banking services occurs in remote locations. In addition to this, many users of mobile phones with online banking-enabled services have to content with the fact that the transactions occur in the air, further complication the challenge. The onus is therefore on the various stakeholders involved in the provision of mobile banking services to urgently address the problem, and win the confidence of the customers.

Distribution of the application

Mobile phone connectivity between on the one hand, the customers, and on the other hand, customers, is another challenge that faces the provision of mobile banking services (Tiwari, Rajnish and Buse 8). As a result, it becomes quite hard for the mobile banking services providers to rely on the initiative of a customer to upgrade applications for mobile banking using their phones. As such, the expectation would be that the mobile phone upgrade of banking updates would be an automatic activity. Nonetheless, before the implementation of this process, there are different issues that need to be addressed, like the synchronization or upgrading of additional dependent devices.


This research paper has used secondary data of purposes of assessing the factors that affect the usage of mobile banking in Saudi Arabia. Accordingly, a qualitative research design has been adopted in which the views and opinions of the staff to some of the banks that have embraced mobile banking in Saudi Arabia are provided. These views and opinions have been obtained from secondary sources.

Research findings on factors affecting mobile banking usage in Saudi Arabia

According to the management of the National Commercial Bank in Saudi Arabia, a banking institution that pioneered mobile banking in the kingdom, many of the banks in Saudi Arabia have already announced their desire to start offering mobile banking services to their customers. Amongst the leading reason, why many banks are intent on embracing mobile banking is the fear that banks would lose clients to their competitors who are already offering mobile banking services. Abdulrazzaq al-Saleh, the manager in-charge of mobile banking at the Riyadh-based Arab National Bank, commented thus about the need by his organization to embrace mobile banking, “We see it as a trend in the industry. We decided to introduce it as if we didn’t; others would and maybe take our customers.” (Conmy 2). According to Saleh, an increasing number of individuals in Saudi Arabia are expected to embrace mobile banking services in the years to come. Although mobile banking has followed in the footsteps of internet banking, in terms of a positive uptake, nonetheless, prior to its taking off, it is important to ensure that the transaction involved are strengthened according to Hamad Sayyari, the head of Saudi’s Central bank. Governor Sayyari concurs that the government in Saudi Arabia is committed to evaluating mobile banking risks, to ensure that the legal aspect’s regarding this issue are address fully. In addition, Mr. Sayyarri confirms that the associated risks of mobile banking, both from within the context of the customers and the banks, are dealt with adequately (Sambidge 1). The author reports that even as 59 percent of the respondents to a study on mobile banking prefer this mode of banking to others, nonetheless, the respondents would want to enjoy this service, at no cost at all. This is according to a survey on Global Consumers and Convergence carried out by KPMG. The study involved 4,000 consumers distributed in over 19 countries. The intention was to understand what the future held for the market of mobile banking. According the research findings of this survey, 67 percent of Saudis who took part in the survey opined that they felt” very or somewhat comfortable” in utilizing heir mobile phones for purposes of executing financial transactions. This is a testament that the Saudis have positively embraced mobile banking services.

Various factors affect the usage of mobile banking in Saudi Arabia

To start with, the usage pattern of mobile banking in Saudi Arabia has been enhanced by the independence of using a mobile phone as a gadget fro making financial transactions, in terms of place and time. From the point of view of mobile banking, usage barrier mainly concerns the level to which the service is applicable, in addition to the necessary changes needed for its use by customers. Kuisma and colleagues (78) are of the opinion that customers who do not use internet banking usually view it to be a difficult service, in terms of application. It is also possible to adapt this factor directly, within the context of mobile phone banking. Furthermore, Kuisma and colleagues (79) reports of unclear proceedings regarding the monitoring process of the channels of electronic banking. Moreover, there is also the issue of inconveniences due to the changing of PIN (Personal Identification Number) codes. With respect to mobile banking, an increasing number of consumers reports issues of inconveniency, such as how the device displays its contents. Besides, users regard using the mobile phone to display bills as a time-consuming and difficult activity. This is because of the limited processed information allowable by the mobile phone devices, meaning that the entire bill payable, for example, cannot be displayed for a customer to view (Laukkanen and Lauronen 326).

On the other hand, it is now possible to access nearly all the banking services using the mobile phone. There is also the issue of ease and speed of use. From a demographic perspective, marital status, gender, age, and levels of education affect the usage of mobile banking in Saudi Arabia. According to a senior IT manager at the Arab National Bank, mobile banking is more popular with the youth, when compared with the elderly. This is because the youth are more likely to keep pace with advancement in information technology, and this includes mobile banking as well. In addition, the IT manager has noticed that more males are users of mobile banking services, in comparison with their female counterparts. Reference group influence also plays significant role in affecting the usage of mobile phone banking in Saudi Arabia. Accordingly, friends and relatives play a role in influencing the use of mobile banking services. In addition, bank clerks and other individuals also influence bank customers to embrace this technology. The perception of technology is yet another factor that has had an impact on the usage of mobile phone banking in Saudi Arabia. For example, as an increasingly number of Saudis become well informed technologically, they are likely to embrace internet and E-mail service in large numbers and by extension, the issue of mobile banking as well.


Various factors affect the use of mobile phone banking in Saudi Arabia. These range from the usage pattern of the service, to demographic of the consumers. In addition, reference groups, such as friends, relatives, and bank clerks, have all had an impact on the influence of mobile phone banking in Saudi Arabia. There is also the issue of technology perceptions, whereby members of the population that have already embraced the use of the Internet and E-mail services for example, are likely to embrace mobile phone banking readily, in comparison with their counterparts that are yet to be acquainted with these services. On the other hand, Banks in Saudi Arabia have found it prudent to implement mobile phone banking, mainly as a way of containing competition, and the associated shift of customers to their rivals whop are already providing the service. Although there are certain regulatory and privacy principles that are necessary for the banks that wish to implement mobile banking services have to fulfil, in line with the requirements of the central bank in Saudi Arabia, nonetheless, there is a need to ensure that mobile phone banking becomes available to all, for enhance service delivery.

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Work cited

Barnes, S.J. and Corbitt, B. Mobile banking concept and potential. International Journal of Mobile Communications 1.3(2003): 273-288.

Conmy, Peter. Saudi Arabian banks race to offer services online. 2009. Web.

Kuisma, T, Laukkanen, T. and Hiltunen, M. (2007) Mapping the reasons for resistance to Internet banking: A means-end approach, International Journal of Information Management, 27.2(2007): 75-85.

Laukkanen, T. & Lauronen, J. Consumer value creation in mobile banking services. International Journal of Mobile Communications, 3.4(2005): 325-338.

Pousttchi, Key, and Schurig, Martin. “Assessment of Today’s Mobile Banking Applications from the View of Customer Requirements,” 7 (2004):184-189

Sadhan, Tariq. 2009. Consumers not prepared to pay for mobile banking: Study.

KPMG’s consumer and Convergence III Survey. 2009. Web.

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Sambidge, A. Yes to mobile banking, no to paying for it-poll. 2009. Web.

Tiwari, Rajnish and Buse, Stephan. The mobile commerce prospects: a strategic analysis of opportunities in the banking sector. Hamburg: Hamburg University Press, 2000

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