Customer Acceptance Of Online Banking In Developing Economies Marketing Essay

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The main objective of the study (Qureshi et al., 2008) was to find out the correlation amongst variables and impact of customer acceptance on online banking. The study states that online banking is one of the vast rapidly growing technological advancements in this era which are undeniably affecting each and everyone's life. The banking sector has taken advantage of this technology to further improve their services to clients and at the same time maximising their returns. Since its introduction, online banking has had a significantly large customer acceptance mainly due to the fact that it speeds up the operations of both customers and service providers and hence it saves crucial time and in addition to that customers who might be spread out through out the world can easily access their accounts through the internet. Therefore more and more people are switching to online banking making use of its great benefits.

The research done based on previous research studies and variables used were; perceived usefulness, perceived ease of use, perceived enjoyment, the amount of information, security and privacy and internet connection. Convenience sampling was used to gather information (this method uses people who are readily and conveniently available; it is used when you are unable to access a wider population due to various reasons such as time or cost constraints). The surveys used had questionnaires which were in the 5 likert point format. As for the findings, the "Pearson Product Moment Correlation Co-efficient" was used to measure the strength of the relationship between the variables. In conclusion, the majority of customers are accepting online banking due to various reasons. The analysis concluded that perceived usefulness, security and privacy, the amount of information were the main factors which contributed to customer acceptance of online banking in Pakistan. All of these factors had a strong and positive effect on customer's online banking acceptance.

Can banks improve customer relationships with high quality online services?

Over the past few years online banking has greatly grown into a favoured distribution chanel by both banks and customers (Herington and Weaven, 2007). The trend of incorporating various online banking services is rapidly growing and banks have been intensively trying to engage their customers into using this technological advancement. In order to make online banking more apealling, some banks offer rewards for using the online services while in addtition to that some banks penalise their customers for using offline services, and others provide certain services online only. However, banks acknowledged the fact that for online banking to be truly successful depended on developing relationships with their customers so as to ensure their loyalty. Therefore it was crucial to fully understand the customer interactions with online banking hence the main objective of this study was to discover the impact of online service quality on the level of customer delight and on the development of customer relationships. Variable used were customer delight, relationship strength, electronic loyalty and electronic trust as variables.

To carry out this study, a convinience sample was chosen to complete a self-complete survey.To analyze the data, factor analysis was used to examine the factor structure for each variable after correlaions were assessed for signififcance of each item to the variable. In additon structural equation modelling was used to examine the proposed model and relationships between the variables used. Results showed that customer delight, electronic trust and stronger relationship strength are not related to the online service quality. On the other hand, online service quality showed that it has an impact on electronic loyalty. In addition, the results also showed that customer delight has no significant relationship on the electronic trust, relationship strength nor electronic loyalty. In conclusion, high quality online services are not sufficient enough in building strong customer relationships.

Online banking applications and community bank performance

The increasing demand for innovative technologies like online banking has led to banks adopting such technologies so as to gain a competitive edge and achieve higher growth rates through reduction of costs and attraction of new Internet savvy customers (Acharya et al., 2008). This study was set out to examine to what extent could online banking have on the financial performance of community banks. Structural equation modeling and multiple regression analysis were both used to carry out the study. The structural equation consisted of variables being alternative profit efficiency, other correlates and lastly online banking that was determined by three parts. The first part being general information (privacy, community information, bank location and services), the second part was financial services (electronic bill pay, investment services, business services) and the third part was core-banking services (commercial loans, residential real estate, personal banking). Do I have to state exactly how the analysis was carried out?

To examine the relationship between online banking intensity and the overall bank's performance, profit efficiency measure was regressed against various variables including online banking intensity index. Results showed that community banks that provided a wider range of online banking services were more proficient than those that did not offer such services. This means that the incorporation of web-based products and services by banks allows them to stand a better chance in the robust competitive arena where they face with other banks.

The role of Security, privacy, usability, trust and reputation in the development of online banking

Looking at the growth of online banking; security, privacy, usability and reputation have always been an issue on consumers. Casalo et al. (2008) conducted a research about these relevant issues. Their findings where;

Privacy and security: with the rise of technology mainly used for processing information, privacy has been seen as a major issue. Consumer are lacking trust especially when looking at how their personal data is being gathered and processed in online transactions thus its becoming difficult to spread e-commerce. Security on the other hand consumers are concerned about the payment, storing and transmission of information. These variables are closely related because of the way consumer's perception in regards to their personal data carried through financial online services.

Usability: the way in which the user is capable of learning to manage the system, avoidance of errors that may occur , efficiency of the site and the satisfaction they get from it. Usability has been seen as a critical factor on the development of e-commerce.

Reputation and trust: reputation is associated with brand equity, organizations credibility to its consumers. The organization should fulfil the promises that they give to their consumers and also be able to show then they care for them. Trust is conceived as levels of competence like satisfy the needs of their customers, honesty as in the belief that they will fulfil their promise and be sincere about it and finally to have an interest in the well-being of the other.

All these variables show that some of them have a relationship towards each other. Security and trust show a direct relationship when looking at handling of private data whilst privacy has been seen as a variant that paves a way for trust. To continue their finding, they conducted a web survey whereby a banners were published for a month and posts collected. Interviewees where also conducted and they were linked to web sites where they could answer the questionnaires and obtain relevant information. The results showed that privacy and security, usability, reputation all have an effect on consumer trust. And trust is positively related to relationship loyalty. To conclude, the development of relationship loyalty in online banking is mainly driven by trust.


This study (Haytko and Simmers., 2009) investigates the effects of human interactions against the overall interactions with the banking services versus automated teller machines versus online transactions. Human encounter satisfaction increases the overall customer satisfaction with the services of the company when looking at the quality of the interpersonal attention and also the response to consumer requirements. By using the FAIRSERV model to find out the relationship between consumer and the service provider and the result of the service satisfaction. Technological encounter satisfaction is derived when the service providers provide efficient and reliable service delivery to their consumers. This can show a link between human encounter and technological encounter because if technological encounter fails then human encounter can take place therefore human overall satisfaction is more important than technological satisfaction. But when looking at the self service encounter like ATM, when there is a service failure consumers a merely to accept the responsibilities and would continue using the service even in the future. The variables tested out were human encounter satisfaction, technological encounter satisfaction, teller encounter satisfaction, ATM encounter satisfaction, online encounter satisfaction and overall satisfaction. There were questions asked in references to the banks that these respondents where using like the time length they had the account, frequency in which the respondent used the teller and ATM services. There were questions about the satisfactions from their encounters and also overall satisfactions of the bank in question. Likert scale was used to find the satisfaction levels of their encounters. To analyze the data, Multiple Regression Analysis was used to determine the effects of the various interacions on the overall satisfaction. The results showed that human encounter was more important before online banking became dominant, consumers now found online banking much more convenient thus reducing the importance in human encounter.

Determinants of User Adoption of E-payment Services

Bankers and online retail shops have to come up with certain value-added strategies to attact and retain loyal customers who will use their online services (Lin et al., 2009). There are certain factors that influence consumers' behaviour in adopting to the use of web-ATM services. (1)Diffusion of innovation attributes, (2) perceived resources, (3) perceived relative advantage, perceived complexity and attitudes, (4) social influence, and (5) trust were the variables that were used to investigate the factors which contributed to the adoption of E-payment services. To carry out the research, people were asked to answer a questionnaire divided into three parts based on their perception of adopting Web- ATM. The first part being the relationship between constructs based on the literature and users' intention in adopting Web-ATM services. The second part measured the users' intention in adopting the Web-ATM. The third part collected the demographic profiles of the respondents. Both the first and second parts were based on the five-point Likert scale. In data analysis, the structural equation model (SEM) was used to certify the relationship between the variables used in the research model whereas the measurement model was used to test the reliability and the validity of items and constructs in the research model. The results of the study showed that perceived relative advantage, perceived complexity, trust and social influences of others all affect the positive attitude towards adopting the use of Web-ATM. The study also found that customers who were willing to use the online services were most likely to accept the thought of online shopping, meaning that promoting the use of online services could boost the electronic commerce industry.


The purpose of this study (Safeena, et al. 2010) was to examine the impact of perceived usefulness, perceived ease of use, consumer awareness on internet banking and perceived risk on the acceptance of Internet banking by the consumers. Understanding how customers perceive online banking is an imperative aspect for the financial sector to being more competitive because more and more organisations are heading towards being more customers focused. Many banks have incorporated the use of internet banking services as a way of maximising benefits for both their customers and service providers with the availability of convenient services in which to do various transactions. By doing so, this has resulted in loyal and satisfied customers. Due to the fact that the internet is the cheapest alternative for delivering banking products as it cuts certain costs through means like the reduction of branch networks and reduction of the number of service staff, this has led to banks being more profitable.

To carry out this study, a survey was done with a questionnaire that use the likert scale used in order to identify the respondents' perceptions. The questions used were developed from previous studies and the convenience sampling method was used. To analyze the data, factor analysis with a varimax rotation and Principal Component Analysis were used. After completion, the study showed that, individuals were sceptical about online banking because they considered it risky, they feared for their security and privacy. Therefore perceived risk has a negative impact on online banking acceptance while perceived usefulness, ease of use and consumer awareness have a positive impact on it.

Internet Banking Customer Satisfaction and Online Service Attributes

The objectives of this study (Riquelme et al., 2009) were firstly to determine whether satisfied customers use more online banking features than less satisfied customers, secondly to determine which customer and online banking aspects contribute to overall satisfaction, thirdly to determine attributes of less satisfied customers. In all various sectors for instance retailing, customer satisfaction has proven to be a key aspect to customer retention or loyalty. All industries have been and are still striving to satisfy their customers as this leads to growth and profits. To achieve the objectives set out, questionnaires based on multi-attribute measures of satisfaction comprising of five sectors; (1) general use of Internet (frequency and internet access), (2) use of Internet Banking (duration and regularity of Internet Banking transactions), (3) Internet Banking services used and how frequently, (4) satisfactions with Internet Banking service qualities, and demographics (gender, etc). Cross tabulations, Multiple Regression and discriminant analyses were used to carry out the data analysis. The results of the study showed that customers use multiple alternatives to do their banking transactions regardless of their level of satisfaction with Internet banking. In addition, courtesy, web content, timeliness and product and services offered all contributed to overall customer satisfaction. Lastly the results also showed that most of the less satisfied customers were like that mostly because they were less technologically ready meaning that they were less educated on how to use certain online banking features.

The relationship between consumer innovativeness, personal characteristics and Online banking Adoption

The banking sector has tremendously transformed from the traditional "brick and mortar" banking to electronic banking (Lassar et al., 2004). E-banking offers several benefits for both banks and retail customers, the main one for banks being cost savings whereas for customers being convenience, customers can access the bank at any time of the day inexpensively. Faced with this technological transformation, banks must have a comprehensive understanding of how it affects its customers. For instance they must specifically identify who is adopting this technology and for what reasons. Through such information, they will be able to predict users of this new technology, firstly by understanding crucial user characteristics and, secondly by understanding how these characteristics relate to new online banking processes and procedures. Hence, the main objective of this paper was to find relationships between consumer innovativeness, self-efficacy on the Internet, Internet attitudes and online banking adaption.

To carry out the research, the Technology Acceptance Model (TAM) was used. This model suggests "a prospective user's overall feelings or attitudes toward using a given technology based systems represent major determinants as to whether or not he/she will ultimately use the system". A random sample was chosen to complete a survey with questionnaires consisting of diffusion of innovation, Internet attitudes, general Internet usage issues and demographic characteristics. To analyze the data, logistic regression was used. Results showed that personal innovativeness characteristics were all significantly related to online banking adoption however the general market innovation had a negative relationship with online banking. Furthermore, Internet self-efficacy (comfort, length, and intensity of web usage) showed positive relationships with online banking adoption. Lastly as for demographic characteristics, neither education nor age significantly affected online banking adoption where as income was positively and significantly related to online banking adoption.

Managing Service Quality: An Empirical Study on Internet Banking

This study's (Khurana, 2009) main objectives were to find out the various aspects which contributed to customer satisfaction of online banking and to identify the customer preferences to online banking as well. In addition, this study also tried to identify the relationship between various demographic variables (age, profession, gender, preferences of bank) and the satisfaction of customers. In addition to demographic variables, the other variables used were efficiency, responsiveness, reliability, easiness of use, privacy of information. To gather the required data, convenience sampling was used on respondents who use online banking and a structured questionnaire was used to get their responses. ANOVA and F-test were used to carry out the data analysis.