The adoption of electronic banking technologies by US consumers

Abstract

Is there an electronic banking (e-banking) revolution in the USA? Millions of Americans are currently using a variety of e-banking technologies and millions more are expected to come "online." However, millions of others have not or will not. This paper explores factors that affect the of adoption or intention to adopt three e-banking technologies and changes in these factors over time. Using a Federal Reserve Board commissioned data set, the paper finds that relative advantage, complexity/simplicity, compatibility, observability, risk tolerance, and product involvement are associated with adoption. Income, assets, education, gender and marital status, and age also affect adoption. Adoption changed over time, but the impacts of other factors on adoption have not changed. Implications for both the banking industry and public policy are discussed. IntroductionElectronic banking (e-banking) technology represents a variety of different services, ranging from the common automatic teller machine (ATM) services and direct deposit to automatic bill payment (ABP), electronic transfer of funds (EFT), and computer banking (PC banking). The use of some e-banking technologies has grown rapidly in the USA, while others have been adopted more slowly [1].Both theoretical and empirical literature related to the general adoption of technology provides a framework to examine the adoption of e-banking technologies. If the promise of increased efficiency for the banking industry and increased convenience and service for the consumer is to be realized, then understanding the factors that influence the acceptance of new products will allow businesses to create a climate in which technological advances with real advantages can be embraced by a majority instead of just a few techno-savvy consumers.This paper applies the theories of technology acceptance and the diffusion of innovations to the adoption of three e-banking technologies: automatic bill payment, phone banking, and PC banking. Empirically, we examine whether and how the characteristics that describe the adoption of new innovations are related to consumer adoption of e-banking technologies. Unlike other studies, we include adoption as well as intentions to adopt in our measurement and we explore how these factors have changed over time.

The adoption of commercial innovations in the former Central and Eastern European markets

“…As postulated by Zeithaml and Bitner (1996), banking is rich in credence qualities, meaning that extra evaluative cues are needed to decrease risks perceived with a service provider. Previous research conducted in the United States has shown that complexity has a negative connection with the use of Internet banking (Kolodinsky et al, 2004). The following hypothesis was proposed to test whether complexity also influences consumers' use of Internet banking in Estonia:…”

“…shown that compatibility has a positive connection with use of Internet banking (Kolodinsky et al, 2004). The following hypothesis was proposed to test whether compatibility also influences consumers' use of Internet banking in Estonia:…”

CONSUMERS’ PERCEIVED RISK AND ITS EFFECT ON ADOPTION OF ONLINE BANKING SERVICES

“…This has caused some researchers to study how to encourage people to accept new things. Kolodinsky et al (2004) studied the theories of technology adoption to the acceptance of e-banking technologies. They examined whether and how the characteristics that describe the adoption of new innovations are related to consumer adoption of online banking technologies.…”

“…The number of banks that are trying to gain this competitive advantage is increasing day by day. Online banking is a technology that represents a variety of different services, ranging from the common automatic teller machine services and direct deposit to automatic bill payment, electronic transfer of funds and computer banking (Kolodinsky et al, 2004). If the protection of consumers' information can be strengthened, the bank can benefit a lot of providing online services (Lee et al, 2013a).…”

The impact of the Internet upon bank marketing

“…17 -18 Technologies which are individually managed by users are known as self-service technologies 14 and are named as Self-service Banking Technologies ( SSBTs ) 19 or Electronic Banking -E-Banking 20 when they use the Internet and are applied in the banking sector. The development of e-banking is a manifestation of the use of new technologies in fi nancial services and represents a variety of services of four types 14,20 : Credit cards , ATMs , Points of Sale , and Home banking (HB) or Internet banking (IB). These new technologies have opened very promising opportunities for fi nancial service companies to add alternative distribution channels, constituting a key means of differentiation, complex but also critical.…”