Paper Example on Understanding Diffusion of Innovation Theory & Its Benefits

1.1 Introduction

The diffusion of innovation theory is founded on the argument that as innovation gains momentums it diffuses throughout the population or social systems because the perceived ease of use, the perceived usefulness of thee innovative information technology drives the user's intention to adopt the information technology and innovation. To adopt an innovation after reviewing the innovation, customers must understand the potential benefits of such technologies. The adoption of technologies is followed by behaviors and attitude changes towards the technologies. Never the less, the adoption of innovation does not occur simultaneously as some people take time to review the innovation before accepting the technology while some customers and banks might never accept the innovation, the speed of diffusion of innovation depends on the user's attitude towards the innovation. Banks as adopters of invasion such as omnichannel banking innovation can be categorized into five distinct groups include innovators who take risk to develop the solution, the early adopters who readily embrace the opportunities in change and are comfortable with radical ideas. The third category include most innovation adopters who wait till they have adequate evidences about the effectiveness of the innovation before adopting. Most adopters are the skeptical groups who will adapt an innovation or technology after identifying the threats of the innovation from case studies. Finally, the laggards are the category of adopters who comply with tradition therefore are conservative. They do not accept innovation and will wait until their sustainability is threatened before adopting an innovative idea. Therefore, the new technology will appeal to the adopters such as banks ad consumers if the innovation offers a relative advantage over traditional strategies. They will also determine the compatibility of then innovation with their core values, experiences, and needs processes and well as investigate the complexity of the innovation. The other two criteria include the trialability and transferability of the innovation as well as the observability of the innovation including the potential and tangible benefits of the innovation. Through omnichannel banking strategy, banks can full customer needs using data-driven strategies such. Large banks provide Omni channels banking because they understand that customers value efficiency and convenience. Such banks capture customers intent and insights then deliver personalized conversations thereby fulfilling the explicit needs of the customers and products then anticipate the customers want.

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1.2 Context

Historically the demand for banking services turned banks into elite bodies that did not have to market their products. However, banks ate increasingly facing unique, volatiles and discontinuous changes that have seen mergers and acquisition of most banks in the UAE to leverage the economies of large scale and avoid filing for bankruptcy. The mergers boom in the UAE has seen the rise in the value of mergers and acquisition in the gulf region to $33.7 billion. For example, in 2017, two largest lending banks merged to create the First Abu Dhabi Bank and in the first quarter of 2019, five banks have merged within Abu Dhabi and across three countries including Kuwait, Bahrain and Abu Dhabi to stay competitive and also to promote innovation adoption in the use driven by unparalleled consolidation wave. With other 70 listed banks in the GCC, many banks are merging to enter the global market and increase the market share. To consolidate their finances. Abu Dhabi Commercial Bank is merging with the Union National Bank (ADCB brand) then the combined entity will acquire Al-Hilal Bank. Through the mergers, the ADCB's position will be consolidated as the third largest bank in the UAE with an estimated total asset value of over $114bn and a customer base of 1milion bankers. In the past years, the mergers between the National Bank of Abu Dhabi and First Gulf Bank lead to the creation of the UAE's largest bank with an estimated asset base of h $175bn and promoted redundancies leading to the downturn in the capital. However, there are also more plans merge more banks and financial institutions in the UAE. The UAE is one of the leading overbanked markets in the world with over 50 banks directly competing for the customers. With these mergers and acquisitions, the consolidated banks are forced to develop solution from cross border and cross banks operations. The consolidated banks will have to develop effective solution to meet the needs of their customer post-merger. The mergers will bring changes and challenges that forces banks to change their modus operandi including customer acquisition and retention. Today, banks are competing for customers and scrambling for the market share. Therefore, they must focus more on how to execute the transactions, and exceed the expectation of the customers they have already acquitted. Now that digital banking and mobile banking has become mainstream, banks must enhance the customers survives by offering the customers more conveniences over the digital platform without confining them to specific devices such as computers. Banks have adopted multiple channels to enable other customers and banks interact round the clock. Even in the context of digitization and digital transformation, there are service gaps that can only be filled through n integrate services such as omnichannel strategy. Banks are facing transformational changes especially in the use of financial technology products. They also must earn the consumers trust with the growing financial technologies. The banks have diverse platforms from which the users can choose depending on their level of technological savviness.

1.3 Thesis Scope

The objectives of my research are to investigate and explore the current state of Digital Banking in the UAE, and the potential for adopting unified omnichannel baking platform that allows access at any time, any channel and anywhere in the UAE. omnichannel enables interactions across multiple customer touch points where intents are captured, insights are derived and conversations are personalized and optimized. The following is a conceptual framework of the thesis scope.

The thesis does not:

• Address the role of blockchain technolgoiy in omnichannel banking
• Investigagre the tye of cyber security technoloigy used in omnichanel banking
• Address how the omnichanels banking model implementation
• Investigate how the govement will unite all Emiratis to adopt Fintech

1.4 Thesis Objectives and Hypotheses

1.4.1 Objectives

The main objectives of this project include:

• To describe the current state of financial technology in the United Arabs Emirates and compare the adoption of financial technology in the UAE and the whole world.
• To analyze the adoption of t digital technology in the UAE
• To investigate the omnichannel banking opportunity in the UAE and determine the opportunities for the financial technology firms in the UAE
• To relate omnichannel experience to the opportunities of the Dubai Expo 2020.

1.4.2 Research Hypotheses

From the background of the study, the following research questions were developed

RQ1. What are the key challenges, and opportunities facing the financial technology sector in the United Arabs Emirates?

This question is aimed at investigating the barriers that have and have the potential of hampering the progress of omnichannel banking. The question also aims to identify opportunities that can be exploited by the banks

RQ2. What is the state of fintech in the UAE and how does it compare with other jurisdictions?

This question aims to validate the claims in the research background and literature review

RQ3. How has the adoption of digital banking impacted the bank's ability to meet customers' needs?

This question aims at determining the benefits of digital banking especially the use of online/digital/mobile banking demands to meet and exceed customer expectations in terms of interaction with the banks anywhere, anytime and across multiple devices.

RQ4. How can players in the financial sector improve interoperable of banking in the UAE to facilitate omnichannel banking system.

This question aims to determine how players in three banking sectors can liaise and collaborate to develop a unified solution for cross banks and cross borders banking in the UAE

1.5 Research hypothesis

H1: a significant increase in the customer interaction touch points through an omnichannel banking model will significantly increase the number banked emirates and impact the UAEs government's injectables to transform the traditional banking.

H2: there is a significant positive correlation between the number of smart devices owners and the adoption of digital, online or mobile banking as the primary platform for financial transactions.

H3: there is a significant, negative correlation between the number of digital, mobile or online bankers and those who own active checking accounts.

H4: Implementation of standardization and regulatory policies by the UAE government will positively impact the growth of fintech and drive the successful transition from the traditional banking to omnichannel banking model in the UAE.

H5: there is a significant positive correlation between UAE government strategy to transform smart cities and omnichannel banking services across all the self-service channels.

1.6 Reaserch Contributions

The thesis will make significant contribution to both research and practice. The thesis will address the opportunity of implement omni channel banking platform in UAE:

Identify b...