Internet banking adoption in India

Abstract

Purpose – The purpose of this paper is to understand the factors influencing adoption of internet banking in urban India. Design/methodology/approach – A model has been proposed based on the technology acceptance model (TAM). The proposed model is referred to as extended TAM and is better suited to identify and quantify the important factors that influence adoption of internet banking technology in India. Primary data relating to the variables affecting technology adoption and demographic profile are collected using a questionnaire survey. Data were collected from 344 individuals who are either current/prospective internet banking users. Structural equation modeling was used to identify the important factors affecting internet banking technology adoption. Findings – The factors of perceived usefulness, perceived ease of use, social influence, awareness, quality of internet connection and computer self-efficacy are primary determinants of the attitude toward the use of internet banking in urban India. The attitude toward the use of internet banking can be used to predict the intention to use internet banking systems by users. Practical implications – This research enables internet banking service providers in urban India to design new service offerings or modify current service offerings to achieve higher adoption rates in internet banking. Originality/value – The paper investigates the adoption of internet technologies by banking users by proposing an extended TAM model that is more appropriate to capture the issues related to adoption in urban India. The paper is of value to researchers in the area of technology adoption and banking service providers in urban India.

Factors Influencing Customers

“…The regression equations are called structural equations, and a collection of such equations is referred to as a structural equation modeling. The coefficients describing how dependent variables depend on independent variables are called path coefficient [15]. The overall fit measures of the structural model indicate an adequate fit of the model.…”

“…In this study, the construct awareness refers to the information that the user possesses regarding availability of online banking, range of services, process of signing up and benefits and risks involved. Awareness has been cited as an important factor in determining a user's adoption of internet banking (Sathye, 1999; Pikkarainen et al, 2004) [15]. In Sudan, recent trends show that banks are increasingly following the practice of highlighting the internet banking services that can be availed by the user.…”

“…This can adversely impact the degree of internet banking acceptance. On the other hand, a better internet service can enhance the user's perception of internet banking acceptance and make the user more inclined to use internet banking (Sathye, 1999) [15].…”

Structural equation modeling in the acceptance of internet banking in the city of Split

“…In most research it was found that PEOU significantly affects the acceptance and use of Internet banking (IB). Sharma and Govindaluri [30] investigated the adoption of Internet technologies by banking users through an extended TAM model among 344 current or potential IB users in India. Through structural equation modeling (SEM), they found that PU and PEOU, among other variables, determine the attitude toward IB usage, which can predict the intention to use an IB service.…”

“…[15]. In order to explain the factors which influence the acceptance and use of Internet banking among the population, many authors have used the technology acceptance model (TAM), one of the most utilized models in studying information system acceptance [1,5,7,8,10,18,20,22,24,26,27,30,36]. This model consists of multiple causal relationships.…”