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UNIVERSITY OF MEDITERRANEAN KARPASIA INSTITUTE OF SOCIAL SCIENCES FALL SEMESTER 2017-2018 FINAL PROJECT TOPIC

UNIVERSITY OF MEDITERRANEAN KARPASIA INSTITUTE OF SOCIAL SCIENCES
FALL SEMESTER 2017-2018
FINAL PROJECT
TOPIC : INTERNET BANKING IN THE FINANCIAL SERVICES SECTOR OF
NORTHERN CYPRUS

SUPERVISOR :PROF.DR.VECLAL GULAY

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STUDENT NAME : GAGAN MIRYALKAR
STUDENT NO : 150201014
ABSTRACT
This project examines how information technology became one of most important factors that affect bank’s client’s lives these days. The research was focused on all twenty two banks including public, private and also foreign banks performing in North Cyprus. The data collection based on both primary and secondary surveys consist of questionnaire, journals and articles were used to measure the factors that influence the bank’s clients for choosing electronic banking in North Cyprus.
The study shows that the follow?ng factors, (i) perceived usefulness (PU), (ii) perceived ease of use (PEOU), (iii) attitude toward behavior (ATB), (iv) subjective norms (SN), (v) perceived benefit (PB) and (vi) perceived risks (PR) affects clients’ intention to accept and adopt all kinds of electronic banking. ATM machines as well as other similar channels such as internet banking, mobile-banking and pc-banking are known as electronic banking systems that provide almost all banking services to the clients via electronic devices.
The finding indicates that factors such as PU, PB, PBC, SN and ATB have a constructive impact on intention and acceptance related to usage of electronic banking in TRNC.
Keywords: TRNC, Electronic banking, Perceived usefulness, Perceived ease of use, Perceived benefit, Perceived risk, Attitude toward behavior, Subjective norm.

ACKNOWLEDGMENT
I would like to thank every single person that contributed and helped me to the completion of my project.
I would like to thank my advisor Prof. Dr. Veclal Gulay for her support. She’s personal guidance throughout all stages of this project is unforgettable.
I also would like to thank Dr. Johnson Olu-egbuniwe , And Dilber Uzer for them guidance and support.
Furthermore, I would like to gratitude my family and my Friends for their financial and nonfinancial supports; without their support and help, I could not have been able to complete this study.

PREFACE
ATB Attitude Toward Behavior
ATM Automated Teller Machine
E-Banking Electronic Banking
EFTPOS Electronic Funds Transfer at Point of Sale
FR Financial Risk
M-Banking Mobile Banking
MMS Multimedia Message Service
PB Perceived Benefit
PBC Perceived Behavioral Control
PC-Banking Personal Computer Banking
PEOU Perceived Ease of Use
PerR Performance Risk
PR Perceived Risk
SeR Security Risk
SMS Short Message Service
SoR Social Risk
SN Subjective Norm
TAM Technology Acceptance Model
TR Time Risk
TPB Theory of Planned Behavior
TRA Theory of Reasoned Action
TABLE OF CONTENTS
ABSTRACT
ACKNOWLEDGEMENT
PREFACE
CHAPTER 1
1. INTRODUCTION
1.1 Introduction
1.2 Aim of the study
1.3 Objectives of study
1.4 Outline of study
1.5 Background of study
1.6 Methodology of study
1.7 Research questions and Hypotheses
CHAPTER 2
2 . LITRETUARE REVIEW
2.1 Electronic banking
2.1.1 Internet banking
2.1.2 Personal computer banking
2.1.3 Mobile banking
2.1.4 Telephone banking
2.1.5 Automated teller machines
2.1.6 Television banking
2.1.7 Electronic funds transfer at point of sale
2.2 Benefits of electronic banking
2.2.1 Benefits for banks
2.1.2 Benefits for customers
CHAPTER 3
3 .TRNC BANKS
3.1 TRNC
3.2 TRNC BANKS
3.3 Internet banking in TRNC
CHAPTER 4
4. CONCLUSION

Chapter 1

INTRODUCTION
1.1 Introduction
Bank’s clients always had been choosing their bank regarding to the facilities that they may get form that bank; this is the reason why banks want to differentiate themselves from their competitors. Due to the bank’s client’s taste some of the banks just offer their customers a traditional banking delivery channel; this is what we know as physical branches. In the physical branches clients have the right to do their transactions such as opening account, transfer money to or from their accounts, get their account balances and transactions summary, etc. but on the other hand there are plenty of customers who wish to have a chance to do their transactions without a physical presentation in the banks. Therefore, the other banks try to satisfy their clients by improving their distribution channels; this is the reason why these banks try to come along with unique ideas for better communication with their clients. Communication is a process that allows meaningful information to pass from one location to the second location and between a sender and one or more receivers.
Electronic distribution channels are the newest form of communication systems between banks and their customers; hence, with the rise of client’s attention to these newly delivery channels, most of the banks all over the world have been start to offer them during last decades.
As the recent rapid improvements of these technological channels landscape of the telecommunication had been dramatically changed in modern age where the old and traditional communication tools have faded out or even replaced with the electronic channels in some banks.
Most popular electronic channels that is using by banks are listed as:

Automated teller machine or ATM
Internet banking
Telephone banking
Mobile banking
Electronic funds transfer at point of sale
1.2 Aim of the study
Despite the importance of electronic banking adoption for the banking industry of countries we can see the large difference between adoption of these technologies by developed and developing countries because of their cultural differences. In the developed countries there is much more attention to the electronic banking. Moreover the developed countries seem to adopt internet banking easier and faster compared to the developing countries.
However, as we know Cyprus is a developing country and the older generations don’t concentrate on electronic banking too much. But the new generation shows much more attention to these information technology services offered by banks. These differences have become a cause of a conflict between banking industry and ways of distributing the information to their clients.
This project will investigate all aspects that somehow will encourage customers’ compliance to accept the newly offered distribution channels and to understand whether distributing information to customers via electronic technology and telecommunication tools affect the banking industry in order to gain more clients
.

1.3 Objectives of study
The purpose of this project is to assess the current electronic banking situation in North Cyprus. It also focuses on ease of using these telecommunication devices as a client of a bank in the banking industry of North Cyprus. As it is known, the ease of use as a factor is not the only reason for adopting to new technology but at the same time the customers has to find these electronic technologies useful. Other objectives of this thesis are to establish a viewpoint about the security of these electronically distributed services for the customers.

1.4 Outline of study

The first chapter represents the introduction to electronic banking and telecommunication services. In this chapter the objectives and aim of the study will be discussed. Quick review of methodology of the study and hypothesis questions of this thesis will take place on this chapter. The second chapter will present the literature review of the thesis; it will illustrate the components and also the mechanism of the electronic banking system. In the third chapter I will describe the
North Cyprus banking industry and clarify the status of each bank operating in North Cyprus. The Fifth chapter will present the data analysis and findings of this study related to those analyzed data. The last chapter will discuss the thesis in general and get the conclusion of the major findings of the whole study.
1.5 Background of study
The internet technology (IT) had a rapid grow during past decades that these days it became one of the most important factor in human lives. IT services are providing human beings a better and easier way to live and to communicate with each other at any place and any time with the minimum cost. These technologies have also become an important factor for businesses and institutions to communicate with their customers and clients easier so this internet technology is used as the main competitive weapon in the financial market. On the other hand, electronic technologies have affected human being’s lives in order to accomplish their tasks faster. Therefore, it is understandable that banking industry has relied on electronic services and devices to mainstream channel of communication since internet technology we as introduced in 1969 (Nehmzow, 1997).

In developed countries and also developing countries each bank always has played an important role related to adopting electronic technologies to compete with their competitors and to offer better quality services to their customers. Indeed banks truly want to perform better to satisfy their clients and get new customers loyalty to build a long-run relationship (Kimball & Gregor, 1995; Thornton & White, 2001) rather than just increasing market share protection and gaining much more profit.
Despite the fact that using internet services offered by banks are assuming to increase banks’ power through offering better services to their clients and perform better in the banking industry, on the other hand adopting these internet technologies has increased the distance between banks and the customers where the physical contact and interaction has been rarely perceived (Eriksson ; Nilsson, 2007).
In this study we will get the idea of how banks’ clients respond to electronic and internet banking and also focus on other aspects that affect acceptance of these electrically channels by the banks’ clients in North Cyprus.

1.6 Methodology of study
The study was applied to clients of the banks operating in North Cyprus. The sample was selected randomly from clients located either in Famagusta, Kyrenia, Lapta, Lefke and Lefkosa; which are the five major cities of the TRNC. For the collection of the first hand data 320 questionnaire were designed and distributed to the people.

To reduce the possibility of inaccuracies during the study, banks’ websites were visited and banks’ offices were also interviewed.

1.7 Research questions and Hypotheses
This study is mainly questioned for measuring factors that affect bank’s clients to use electronic banking in TRNC. Therefore, three main theories of TRA, TAM &TPB with the additional factors related to risks and benefits were used. Hence, the following eighteen hypotheses were proposed and tested in banking industry of North Cyprus:
H1: Perceived usefulness is expected to influence positively on the acceptance to use electronic banking.
H2: The easy usage of electronic banking has a positive affect on the electronic banking usage.
H3: The intention of customers to use electronic banking is also based on their attitudes.
H4: Intention to use electronic banking is positively shaped with subjectrive norms as well.
H5: The behavioral control of customers to use e-banking is another constructive effect.
H6: On the other hand, performance risk adversely stimulates the attitude toward usage of electronic banking.
H7: Risk of performance additionally affects the use of e- banking.
H8 & 9: Financial risk is another factor which negatively affects the use of electronic banking as well as the intention to use these services by customers.
H10 & 11: The use of electronic banking is at the same time badly affected by time and social risks.
H12: Moreover, social risk and subjective norm are negatively correlated with one another.
H13 & 14: Intentions and attitudes of customers to use e-banking are again negatively influenced by security and privacy risks.

H15 & 16: On the contrary, intentions and attitudes to use e-banking increases amongst customers with the perception of benefits of online banking.
H17 & 18: Perception of electronic or online banking being easy to use and beneficial makes a direct positive impact on its use.

Chapter 2
LITERATURE REVIEW
2.1 Electronic banking
Electronic banking or banking via electronic devices (E-banking) can be described as a bank that is using electrical and electronically technologies to distribute and share information through broad electronic channels; most of the people mistakenly think that electronic banking is just about internet, but internet is just one of the vehicle that is used by banks to do their transactions but it is not the only one. E-banking regards to using an electronic devices and machines by banks to communicate with their clients without their physical presentation in the banks’ branches; so, the introduction of the electronic banking has allowed banks to use the new generation of banking services and activities without investing money in expensive physical branches. Burr (1996) describes the electronic banking as the connection between banks and their customers via electronic devices to plan, manage and administer their financial transactions. These media devices used by banks are computers, televisions, telephones or mobile phones (Danniel, 1999).

Gopalakrishnan et al. (2003) mentioned that in the electronic banking area there is no need for physical present of neither clients or banks for transact the services or even goods; in this case the main focus is on electronic machines and distribution systems to handle and carry the specific task through customers; therefore,
customers who like to use electronic devices or have a bit knowledge about that, can easily use these electronic banking distribution channels to access to their bank’s account .

Figure no 1 : Banking Distribution Channels
Electronic banking and traditional banking are working in the same way to offer the services and provide the products to the consumers of a bank; the only difference between traditional banking systems and the electronic devices is that clients will access their account for making payments, reconcile their statements
and get their account information by using the electronic devices such as computer, cell phone and etc. rather than paper works.

2.1.1Internet banking
The electronic banking is related to the banks that are using electronic devices such as computer, telephone or mobile phones to communicate with their clients; these electronic devices mostly work with the help of internet connection. . In addition, all new kinds of businesses such as software, internet and telephone companies became interested to provide the electronic banking services to their clients. As the study by Hagel and Eisenmann, (1994) states, providing electronic banking services by such businesses have been entered them into the banking industry. Another study by Hagel and Lansing, (1994) agrees on this opinion.
Internet banking is the cheapest, the most popular and the most important delivery channel which is adopted by the banking industry for banking services and products. Thus, research by Sathye (1999) & Pikkarainen (2004) proves that internet banking is the cheapest delivery system for delivering all banking services. However, it requires users to have a minimum level of internet skills, so customers who like to use computers and technology feel comfortable to get services online from internet banking; therefore most banks allow their customers to contact with them via World Wide Web (WWW) at any time and in any place that Web access is available. However, we cannot always say that a bank provides internet banking when it has the website; banks should provide a portal to their clients through a transactional website. The customers mostly use the bank’s transactional website to check their account balances and review their bank’s statements (Weir et al. 2006) as well as bill payment and wire transfer of funds.

2.1.2 Personal computer banking
The study by Karjaluoto et al. (2002) reveals personal computer contact to the internet is the greatest electronic distribution channels in the banking sector.
The personal computer banking (PC banking) gives clients the chance to do their banking transactions via their personal computers 24 hours and seven days a week. This service gives clients the opportunity to handle most of their banking account transactions if they have been installed the assigned software distributed by the bank to their personal computer. PC banking required customers to have a PC, a dial-up modem and skills related to PC so they can access to a bank server through the phone line. The connection of PC banking is expected to be in the home. However, this connection may be in an office, restaurants or even in the shopping malls; so in general the clients are able to use them at any time and in any place that Web access and their personal computer is available. ; This means that the clients are not be able to connect to their bank if they don’t have access to their personal computers that is connected to bank directly with special modem.
2.1.3 Mobile banking
Mobile banking is involved with the access to the activities that are in the range of banking products by using a smart cellphone. This source of electronic banking system allows bank’s client to easily review their account information, money transfer, bill payment and all other products related to saving or credits (Birch, 1999). The mobile banking allows the customers to access to their personal account with short message service (SMS), multimedia message service (MMS) and/or 3rd generation mobile network connection.

2.1.3.1 Short message services
All available mobile phones in the market support Short Message Service. This service is phone to phone text message with the maximum length of 160 characters. Short message service (SMS) technology allows its users to exchange messages with other users by sending and receiving text messages to each other’s mobile phones.
2.1.3.2 Multimedia message services
Multimedia message service also is another messaging service that allows its users to exchange messages with the other mobile subscribers; MMS is known as upgraded form of SMS; which it allows the users to send and receive text message as well as additional types of messages such as pictures, videos, audio or the combination of all. This texting service that is supported by the majority of modern cell phones, it also allows the users to send messages from the mobile phone to e-mail.
2.1.3.3 Third generation mobile network connection
A third generation mobile network connection (3G) is the name of the third generation wireless of mobile telecommunication technology. The 3G wireless network allows its users to have voice telephony, internet access for mobile phone, video calls, mobile TV and etc.
2.1.4 Telephone banking
Telephone banking is also one of electronic banking sources which the clients can get the information related to their bank accounts with a single call virtually without any time or place boundaries over their telephone. Telephone banking is one of the most convenient, fastest and easiest distribution channels for accessing to bank to get account balance information, paying bills electronically or transfer the funds betweena client’s account at any time and any location, through this service customers are not able to make cash withdrawals or cash deposits.
In telephone banking system two types of services are operating; first one is automated service which used to handle the normal and simple tasks but the second one is operator-attended service which used to take more complicated situations where the automated service is not able to operate. For security reason of using the telephone banking system the clients are required to have a personal identification and a verbal password given by the bank.
2.1.5 Automated teller machines
Among the electronic banking innovations Automated Teller Machines (ATM) is one of distribution channel that can be considered as one of the crucial components of E-banking.
ATM machines are required a card and four digit specific personal identification number (PIN) or a password to allow users to withdraw money and access an account. On the other hand ATMs are known as self-service terminals that allow thecustomers do their transactions faster and more convenient (Rasiah,2010) rather than wasting their time to wait in the bank or even wait till the banks get open next day.
ATM cardholders can easily get the financial services such as cash withdrawals, bill payment, funds transfer or non-financial services such as checking their account and even change their PIN code from these Automated Teller Machines. Most banks charge a fee for the customers who wish to use the ATM’s services while they don’t have an account with them; this fee can be seen on the Automated Teller Machines’ screen before the transactions are completed.

2.1.6 Television banking
Television based or simply TV-based banking is another banking delivery platform of the electronic banking where the customers with the use of a satellite or cable can access to their banks and get their account information on their television screens (Daniel, 1999).
Wah (1999) suggests that the computer screen is not the only place that we can see electronic banking services.

2.1.7 Electronic funds transfer at point of sale
The point of sale terminals are small computerized machines that allows the customers to easily pay for their purchases electronically by the use of a card and a PIN number.
EFTPOS machines are known as a very fast, easy, secure and convenient electronic banking distribution channels where they provide 24 hour-service, seven days a week that work even after banking hours. The cardholders can directly go to stores and purchase what they need without carrying cheques and cash in their wallet.
2.2 Benefits of electronic banking
In recent years, banks have recognized the importance of electronic banking; because with the use of these e-banking channels they can differentiate themselves from their competitors and to attract more new customers as well as to retain the existing ones. This is conforming to the studies by Kimball and Gregor (1995) and Thornton and White (2001). Using distribution systems via electronic channels lead banks to reduce costs and increase revenue (Simpson, 2002). However, cost reduction for the banks is only reliable when consumer adoption increases (Bradley and Stewart, 2003).

2.2.1 Benefits for banks
Internet banking as a delivery channel has provided many benefits to the banks, this benefits include cost saving, reducing lead time, increasing business opportunities, efficiency, reaching new customers as well as improving the banks’ reputation and bring customers satisfaction (Brodgon, 1999; Jayawardhena & Foley , 2000; Seth et al. , 2004; Turban et al. , 2008) .
Dawes & Rowley (1998) state that internet banking as the main component of electronic banking has enhanced banks’ services in the banking industry. The usage of electronic banking by banks has improved their market image and clients perceive them as leader in accepting the new technological services. Sheshunoff (2000) in his study states that there is a need to build dominant barriers for the current customers and he also adds that this is the most important reason for banks to adopt internet banking. In this case if the banks’ clients accept and adapt to internet banking the chance of replacing their bank with another bank is expressively reduced. As Tan and Teo, (2000) state in their study, this also means that electronic banking services are known as the essential factor for the long-lasting survival of banking in the electronic banking world.
Furthermore offering internet banking services as a browser-based delivery channel has an important advantage such as fewer physical branches (Cheng et al. 2006) that decreases the number of stuff and therefore it led the bank to have much less operating costs (Frost, 2011) and so increase cost-effectiveness (Centeno, 2004). According to Robinson (2000) the cost of doing transactions electronically are much less compare to the cost of these transaction done at banks’ branches. Moreover, reducing external costs allow banking industry to save money and help the banks to become more profitable and that’s the reason why internet banking known as the most profitable distribution channels.
2.1.2 Benefits for customers
Electronic banking is known as the extremely beneficial channel to banks clients because of costs saving, and savings in terms of space and time. (Turban et al. 2000). Furthermore, electronic banking has a rapid and fast reply to complaints and to improvement of their services; this is known as another benefit of electronic banking.
The greatest benefit of electronic banking is related to its cost, because it is cheap or even in some cases it is free to clients who want to do their transactions electronically. A study by Hwang et al. (2003) confirms that electronic banking channels provide all kind of services to the banks’ clients in a faster and cheaper way. Therefore, the number of electronic banking websites all around the world has increase to more that thousands (Gurau, 2000).
Abdul Hamid et al. (2007) approve that customers can accessing their accounts directly without hassle of physically visiting banks. Furthermore, banks provide comfort to their clients (Gerrard and Cunningham, 2003), their customers can easily access to their accounts 24/7 days a week (Bursetin et al., 2008; Maenpaa et al., 2008), whereas in the traditional banking, people have to accept couple of days of delay in funds transfer, but with the help of electronic banking this has come down to a real time. Therefore in the electronic banking industry there is no need for the customers to wait till the next day when the banks get open, they easily can use electronic banking devices to assess their account and do their banking transactions. In this situation, the electronic banking saves time (Gerrard and Cunningham, 2003), as well as money, it also provides convenience and accessibility that leads to increasing the customers’ satisfaction (Wang et al., 2003).
Additionally, in some banks’ branches, people who have the banks’ card can easily get the line number which is different from the numbers that are taken normally and without any card; these line numbers give the customers the chance of not waiting in a bank branch as long as the people without card
Chapter 3
TRNC BANKS
3.1 TRNC
Cyprus island with the area size of 9,251 square km that is the third largest island located in the Mediterranean Sea; the total population of Cyprus was last reported 1,116,564 in 2016 according to World Bank after the civil war in 1974 the island divided to two parts of North and South with a border that is called “the green line” and is controlled by the United Nations (UN); the South side of the island with a size of 5,895 square km is holding more than 978,000 people and the North side, with total area of 3,355 square km has a population of approximately 294,396 (2012 census).
The south part of the island or the Greek speaking side has been continued as the internationally recognized state after the division of the island; with the respect of EU politics the south state is known as more economically developed country (MEDC) where the Turkish Republic of North Cyprus (TRNC) is not recognized by the rest of the world except Turkey. As we know Turkey is a developed country that has a currency of Turkish Lira (TL); TRNC also has the same currency.
As mentioned before TRNC is only recognized by Turkey so managing and controlling the economy of TRNC has been done by Turkey; Less-economically
developing country of North Cyprus that is heavily affected by the monitory situation in Turkey where Gunsel (2007) states that the attack on Turkish currency in 1994 and 2016 heavily affected the monitory policies in banking sector of TRNC, this dependency was not just related to currency fluctuations but also on the offered services by the Turkish banks. When Turkish banks started to come up with newly distribution channels, Cypriot banks also started to expand their information distribution criteria in the island.
3.2 TRNC banks
In last decades, developing countries have been faced to enormous growth as the economy liberalized in early 1980s. Thus, TRNC was also affected by the liberalization in those years. The new liberalization policies in 1990s have been influenced North Cyprus’ economy, where the number of TRNC’s lawful banks has been increased from 13 to 29 during 1997 to 1980s. Increase in total number of banks in TRNC made the banking industry of this island more competitive (Bektas, 2006).
In second quarter of 2013 number of bank branches in TRNC has been increased to 218; this number was last reported as 209 in the previous quarter. As TRNC central bank announced, 66.01 % of this changes was from private sector banks, 21.56 percent was belong to foreign banks and the rest (17.43%) was due to changes in public banks.
As central bank of TRNC states from March 2013 to June 2016 number of banks personnel increased from 2753 to 2766; that 1677 personnel were working in private banks,564 personnel in government banks and the rest 525 were personnel of foreign banks. The central bank of TRNC announce that total number of personnel performing in banking industry increased by 176 and became 2766 during one year from March 2016.

Lawful banks of TRNC Banks
Kibris Vakiflar bank Ltd. www.vakiflarbankasi.com
Kibris Iktisat bank Ltd. www.iktisatbank.com
Kibris Turk Kooperatif Merkez bank www.Koopbank.com
Limasol Turk Kooperatif bank Ltd. www.limasolbank.com
Credit West bank Ltd. www.credirwestbank.com
Asbank Ltd. www.asbank.com.tr
Turk bank Ltd. www.turkishbank.net
Universal bank Ltd. www.universalbank.com.tr
Akfinans bank Ltd. www.akfinansbank.com
Near East bank Ltd. www.yakindogubank.com
Nova bank Ltd. www.novabank.com.tr
Seker bank Ltd. www.sekerbankkibris.com
Viya bank Ltd. www.viyabank.com
kibris Kapital bank Ltd. www.capitalbank.com.tr
Kibris Faisal Islam bank Ltd. www.faisalislambank.com
HSBC bank A.S www.hsbs.com.tr
Turkiye Garanti bank A.S www.garanti.com.tr
Turkiye Halk bank A.S www.halkbank.com.tr
Turkiye IS bank A.S www.isbank.com.tr
Turkiye Ziraat Bank A.S www.ziraatbankasi.com.tr
ING bank A.S www.ingbank.com.tr
Turkiye Ekonomi bank A.S www.teb.com.tr
3.3 Internet banking in TRNC
Even though, electronic banking is common in most of the developed countries and for many developing countries, such as TRNC that is still building up its internet technology infrastructure; the e-banking is still less developed.
Adoption of electronic banking distribution channels as the newest delivery service and a communication tool have been increasing rapidly by local banks to differentiate their products and services among their competitors. These competitors mostly were foreign banks that were operating in TRNC and have been started to offer electronic banking years ago. This was a big disadvantage for the local banks which were offering just the traditional banking services to their customers; so they could easily lose their clients due to lack of not offering new technologies. Yet, majority of local banks were assuming that low percentage of their clients would use e-banking services. However, local banks felt that this assumption might or might not be true, but still they didn’t want to create a negative image about their quality and diversity of their financial services through their customers. Whether the customers would accept these electronic banking services or not, the banks were pushed to adopt the electronic banking services at that time. Thus, domestic banks start to adopt the earliest form of electronic and technological devices such as ATMs due to strong competition in the banking sector. However TRNC banks where not an innovated banks but still they were so good for adopting these electronically technologies ideas transformed from other countries.

In 2016, North Cyprus with 1,85,000 potential internet users and total twenty seven banks, the potential market for the internet banking was tiny (Abeido, 2004). However, the diffusion of internet banking services increased remarkably from 8.7% in 2012 to 30% of total banks in 2017. However, none of the domestic banks were offering electronic banking services in first quarter of 2017. Furthermore, after two years, local banks started to view the internet banking advantages from other sight.
Kibris Iktisat bank was the first domestic bank that introduced electronic banking and launched its website in 2003, but still it was the first local bank that introduces its electronic banking services in 2016 and the first local bank of TRNC that offered credit cards to its customers. Table 3 shows the establishment informational website as well as transactional website for each local bank of TRNC.

Internet banking in K.T . KOOP. MERKEZ BANK
TK? – Single Use Password
Internet is a technology that provides additional security for your entrance to the branch.

It generates a “One Time Password” and transmits it via SMS to your mobile phone in seconds using VipSMS technology.

It is used in addition to your Internet banking entries, your financial transaction approvals, or your security settings for your security changes.

Different password every time
TCS generates variable ciphers. Each generated password can not be used by you or anyone else for the second time.

The TCS has a period of use, and the unused password becomes invalid within 3 minutes.

In creditwest bank
– Creditwestbank.com, with its renewed look is now much more practical, safer, functional and advantageous!
– One time login with SMS passcode,
– Customized ind?vidual and commercial customer pages,
– Additional user identification and authorization function for commercial customers,
– E-deposit and e-currency advantages for Internet customers,
– All Cardplus credit card transactions (credit card statement display, paying another credit card with your card, etc.)
– Instant cash advance,
– Money transfer and EFT transactions.

In Turkiye Garanti Bank
Garanti Internet Banking is at your service 24 hours a day 7 days a week! At home or at the office, you can perform all your banking transactions in a much easier and quicker way through Internet Banking at anywhere you have internet access.Furthermore, when you hover over the menu steps with the renewed menu structure, You can;
1.Quickly view the sub-menu steps
2.Access summarized view of current transactions, calendar and all other transactions on your main menu by using the main menu button.

3.Access your personal banking fields such as Assets/Liabilities, Income/Expenditures and Cash Flow through the Summary menu,
4.Instantly access your Profile and Preference settings with the Settings button.

With different menu steps that will make your life easier, performing banking transactions on Internet Banking is now more pleasant.

CHAPTER 4
CONCLUSION
4.1 Introduction
In recent decades, electronic banking has been found as an important delivery channel for the bank’s clients to do their transactions without their physical presentations in the bank’s branches. As it was mentioned in the previous chapters, the main purpose of this study is to provide insights into factors affecting TRNC’s bank’s client’s decision to whether choose electronic banking channel or continue to do their transactions via traditional banking such as branches. Therefore, in order to collect relevant primary data a questionnaire was prepared ; the questions related to perceived usefulness, perceived ease of use, intention to use and attitude were adopted from cheng et al (2006), questions related to perceived behavioral control and subject norm were adopted from Wu & Chen (2005); questions linked to perceived benefit were adopted from Yiu et al. (2007), the questions related to all kind of risks such as performance risk, financial risk, social risk, time risk and security risk were adopted from Featherman & Pavlou (2003).
Thus, the questionnaire has been tested by factor analysis and internal consistency test, and fortunately our questionnaire was reported as valid and reliable.

4.2 Managerial Implications
After distributing the questionnaire, data was collected and examined to understand what factors affect ITU electronic banking.
The results show that gender doesn’t affect opinions of participants related to electronic banking usage. Moreover, type of a bank that the participants work with does not affect their opinions related to choose electronic banking. Likewise, participants’ opinions about electronic banking usage do not affected by their computer access nor their internet access status. The point here is that electronic banking is not just related to internet banking and personal computer banking, as we mentioned in the previous chapters ATM machines, EFTPOS, television banking, telephone banking and mobile banking are also known as electronic banking.
Furthermore, in general participants’ opinions about electronic banking usage do not affected by participants’ age except for time risk. In this case the participants’ opinions related to usage of electronic banking are less likely to be affected when they are in lower age ranges. Not surprisingly the younger generations are less concerned about managing and saving their time compare to participants older than 26 years.
Additionally, education has a different result compare to the other demographic characteristics. The results show that the education level of participants affect most of the factors related to their opinions due to decision of using electronic banking. Participants’ opinions related to usage of electronic banking are less likely to be affected when they have a lower educational level; this statement is true for factors
such as perceived usefulness, perceived ease of use, perceived benefit, perceived behavioral control, intention to use and attitude. On the other hand higher education level affects participants’ opinion related to their decision of using electronic banking due to financial risk. Therefore, people with higher educational level are more careful about risks that are related to financial factors such as losing their money. Moreover, educational level as a demographic characteristic doesn’t affect participants’ decision about subjective norm, performance risk, social risk, time risk nor security risk.

The findings have indicated that perceived usefulness, perceived benefit, perceived behavioral control, subjective norm and attitude toward behavior have a positive effect on intention to use electronic banking by people who has a bank account in Turkish Republic of North Cyprus. Based on these findings we can say that if operating banks in TRNC stimulate these factors it leads bank’s clients to intent to use electronic banking.
But, the problem here is that banks don’t have an entire control over all these factors. For example, banks have no control over perceived behavioral control of their clients when it is related to client’s knowledge, ability and resources which are related to individual’s educational level and skills. However, banks can increase their electronic banking user’s knowledge by giving them tutorials of usage information or to provide a demo for each specific system.
Moreover, attitude toward behavior is another factor that banks don’t have control over it when it is all related to a person’s opinion and viewpoint. But fortunately
banks have many ways to influence individual’s attitude toward behavior. For instance, PB has a direct effect on ITU electronic banking as well as indirect effect through attitude toward behavior, therefore; banks can provide a broader range of banking services and with a minimum transaction fees through electronic banking.

Another factor that has a positive effect on attitude toward behavior is perceived ease of use; so, bankers can increase their client’s attitude toward using electronic banking by keeping their electronic banking devices simple, easy to use and with the minimum requirement of mental effort, This factors increases the attitude toward behavior and so increases the likelihood of usage of electronic banking.

Furthermore, subjective norm is another factor that positively affects intention to use electronic banking. This factor is totally about other’s opinion and ideas which banks don’t have direct control over it, but generally, bankers may increase this if they decrease the risks related to potential loss of status in an individual’s social group, however, as results showed in TRNC case social risk doesn’t have any effect on subjective norm.
FR is the only factor that negatively effects an ITU E-banking by bank’s clients in North Cyprus. Therefore, bankers should keep in mind that they have to increase their financial security to minimize the risks related to this factor. Banks always are known as a safe and trustable place for clients to put and stash their money but,
if the clients have a fear that they may lose their money due to careless mistakes through electronic banking and they might not get the compensation back from the bank theywill not trust electronic banking and in this case they will not choose electronic banking.

4.3 Limitations and Further Recommendations
Even though, this thesis presents significant progress towards understanding the factors that affecting usage of electronic banking by banks’ clients in TRNC but, there are some limitations that should be noticed. One of the major limitation of this study is that the results of this thesis are based on a medium size sample that total 320 surveys had been distributed which in total 261 usable responses were obtained. Furthermore, the sample of the study was constituted by people leaving in TRNC, where they were collected from five major cities of TRNC (Lefkosa, Girne, Famagusta, Lefke and Iskele). Therefore, the possible bias could be created to the results, because people from larger cities may have different view on accepting and using the electronic banking compare to those who lives in smaller cities. Finally, as we said in previous chapters the questionnaire has been prepared base on: TAM, combination of TPB & TRA, Perceived risk and perceived benefit. Therefore, there might be other possible factors that influence the client’s intention to use electronic banking but they have not been mentioned.
The future researchers should keep in mind that, the case of electronic banking is a new subject for the banking industry of TRNC; electronic banking is on its early stages because the first presentation of electronic banking by local banks in this island was started in 2004, which it has not passed more than ten years. Moreover, in the case of TRNC we can see that still some banks don’t provide any services related to electronic banking to their clients.

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