Usage of Internet Banking in Urban Poor during Covid 19 Pandemic

Abstract

The banks are trying to popularize the concept of Internet banking among their customers to meet the ever-increasing traffic in physical bank premises. Compared to some developed and developing countries, Internet usage to engage in banking activities is at a primary stage in Sri Lanka, mainly restricted to checking bank balances. However, Internet banking has entered a new path with the COVID-19 pandemic that Sri Lanka faced from the year 2020. In particular, urban poor people are usually left out of the formal financial system and adoption of technology. These people are constrained by both the demand and supply sides to reach the door of technology. Among the challenges they faced were a lack of financial illiteracy, a negative perception of technology, irregular income, and a lack of trust. Even though there are information technology companies and financial companies in the urban area, a large segment of the population is excluded from using the technology. This paper aimed to identify factors that affect Internet banking usage in the urban poor during the COVID-19 pandemic. The article discusses research on factors affecting Internet banking usage, the advantages of Internet banking and the status of Internet banking during the COVID-19 pandemic. Primary data was collected through a semi-structured questionnaire from 200 urban low-income customers in the Colombo Divisional Secretariat. Data were analyzed using a binary logistic regression model. The study results have shown that income, education, and benefits of Internet banking positively impact Internet banking usage of urban poor. According to that, there is a need to study the financial inclusion of the urban poor to formulate appropriate strategies for increasing the inclusion of the urban poor. Therefore, urban poor people should be fully and effectively educated about Internet banking, and it helps to identify which policies and programs should be designed for the urban poor.