Segmenting the non‐adopter category in the diffusion of internet banking

Abstract

PurposeFor a new technology‐based product or service at an early stage of diffusion, it is likely that only a small subset of consumers have adopted it. When non‐adopters still comprise the majority of the target populations, describing all non‐adopters as a homogeneous population may be inaccurate and inappropriate. It is important to be able to identify differences, not only between adopters and non‐adopters, but also among non‐adopters, the latter providing a means of identifying the consumer segments likely to be profitable in the future. The first objective of this paper is to demonstrate the appropriateness of further segmenting the non‐adopter category based on motivations (intentions) to adopt internet‐banking by those who are “persistent non‐adopters” and those who are likely “prospective adopters”. The second objective of this paper is to further the understanding of the adoption process of internet banking by examining a range of diffusion factors that affect consumers’ adoption behavior.Design/methodology/approachThis study identifies three adopter segments, persistent non‐adopters, prospective adopters, and adopters, in the diffusion of internet banking services based on individuals’ intentions to adopt internet banking and their actual adoption behavior, using the data collected by the Graphic, Visualization, & Usability Center and Georgia Tech Research Corporation. Selective adoption factors (i.e. perceived attribute importance of internet banking, perceived risk, compatibility with existing banking services, and compatibility with the internet and computer technologies) were used to predict individuals’ adoption status through multinomial logit modeling.FindingsIt was found that further segmenting the non‐adopter category revealed meaningful differences between prospective adopters and persistent non‐adopters. This study reflects that the previous research practice of bifurcating adoption categories (adoption versus non‐adoption) is oversimplified. The two qualitatively different segments, prospective adopters and persistent non‐adopters, should not be lumped together in the diffusion of internet banking.Originality/valueThis study provides comparison profiles of the three adopter categories and discusses marketing implications for segmentation.

The Impact of Cost, Customer Experience, Ease of Use, and Trust towards Adoption of Online Banking

“…Consistent with prior studies (e.g., Baraghani, 2007;Chen & Barnes, 2007;Chong, Oii, Lin, & Tan, 2010;Dauda et al, 2007;Gefen, 2000;Lee et al, 2005;McKnight & Chervany, 2002), the findings in this study show that trust will influence the adoption of online banking in Selangor, Malaysia. Chong et al (2010) stated that people from developing countries tend to be more cautious when using online banking services as it involves money and people are used to conduct monetary transaction in-person.…”

“…As online banking services are delivered through internet, Lee, Kwon and Schumann (2005) suggested that customers have to be familiar with the technologies, such as personal computer and web browser. This was supported by the study conducted by Laforet and Li (2005) who investigated the customers' attitude towards the online banking services in China.…”

Factors That Influencing Adoption of Internet Banking in Malaysia

“…Meanwhile a study by Wan, Luk, & Chow (2005) cites that even though internet banking adoption is most affected by convenience, but it cannot compete with ATM because ATM is the only channel that enable withdrawal of cash at anytime and does not require customer to have an access to computer facilities. In addition, Lee, Kwon, & Schumann (2005) also found convenience as key factor on determining users' intention in adopting internet banking services. At the same time, another study by Abdul Kabeer Kazi (2013), the studies in Pakistan shows that a higher education level of students has more intention in adopting internet banking because of convenience.…”

“…Consumers should have a familiarity with computers and must have skills on using web browsers because internet act as a key medium for internet banking services (Lee, Kwon, & Schumann, 2005). Consumers that have more knowledge on computer technologies may easily adopt internet banking and enhance their efficiency in the use of internet banking.…”

How Can We Predict and Evaluate E-Learning Service Quality?

“…Based on a survey of 1355 respondents [37], it was discovered that current and prospective adopters perceived convenience as a determinant of intention to adopt e-services. Convenience in e-learning refers to the capability to access e-courses at anytime and anywhere.…”