Internet Banking Adoption in an Emerging Economy Indian Consumers Perspective

Internet Banking Adoption in an Emerging Economy Indian Consumers Perspective

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56 International Arab Journal of e-Technology, Vol. 2, No. 1, January 2011 Internet Banking Adoption in an Emerging Economy: Indian Consumer’s Perspective Rahmath Safeena, Hema Date and Abdullah Kammani National Institute of Industrial Engineering (NITIE), Mumbai, India Abstract : Information technology Services is considered as the key driver for the changes taking place around the world. Internet banking (IB) is the latest and most innovative service and is the new trend among the consumers. The shift from the formal banking to e-banking has been a 'leap' change. This study deter mines the factors influencing the consumer’s adoption of internet banking in India and hence investigates the influence of perceived usefulness, perceived ease of use and perceived risk on use of IB. It is an essential part of a bank’s strategy formulation process in an emerging economy like India. Survey based questionnaire design with empirical test was carried out. The results have supported the hypothesis. Keywords : internet banking, perceived usefulness, perceived ease of use, risk, India, emerging economy Received March 2, 2010; Accepted June 28, 2010 1. Introduction User adoption of a technology has become a crucial or significant measure of the success or effectiveness of that technology. Revolutionary development in Information and Communication Technology (ICT) in the past 20 years has impacted individuals as well as businesses in a profound way. Internet banking (IB) is a radical technological innovation with potential to change the structure and nature of banking. To sustain business competitiveness, more and more banks are transforming from their traditional approach of “bricks and mortar” into a “clicks and mortar” one under the recent emergence of electronic commerce and business [18]. Customer satisfaction and customer retention are increasingly developing into key success factors in e- banking [11]. [45] stated that the diffusion of IB is more determined by customer acceptance than by seller offerings. Though customer acceptance is a key driver determining the rate of change in the financial sector, empirical studies on what is holding customers from acceptance of IB have been few [59]. Not enough is known regarding how customers perceive and evaluate electronically delivered services. [36] have also recently highlighted the need for further research to measure the influence of e-service on customer- perceived service quality and satisfaction [28]. While IB has grown rapidly, there is not enough evidence of its acceptance amongst consumers. One of the most utilized model in studying information system acceptance is the technology acceptance model (TAM) in which system use (actual behavior) is determined by perceived usefulness (PU) and perceived ease of use (PEU) relating to the attitude toward use that relates to intention and finally to behavior. The reason for TAM’s popularity is because of its parsimony and the wealth of empirical support
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This note was uploaded on 04/21/2011 for the course BUSINESS AAF001-1 taught by Professor Dr.tony during the Spring '11 term at University of Bedfordshire.

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Internet Banking Adoption in an Emerging Economy Indian Consumers Perspective

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