Abstract:
Banks in Sri Lanka have been at the forefront in the deployment of ICT based products and
services. With Electronic banking, financial institutions began to exploit new approaches to
their business while delivering their customers a wide range of value added products and
services in aligning with the product delivery mix with the new technology. One of the major
E-banking channels is the Internet Banking (IB). Though there is a growth in transaction
volume of IB in Sri Lanka over the years, yet it takes less than 10% compared with total
transaction volume. This implies that still the IB services have not been used as much as
customers could or should have used them.
There are few studies have been conducted to determine the critical factors affecting the
customer adoption of IB. The objective of this research is to identify the different banking
customer segments on the demographic and socio-economic characteristics and then to
identify the deterrent and appealing factors governing in these segments that affect IB
adoption. The paper describes IB-readiness as the state of being fully prepared to engage in
IB, and it is argued that both the potential banking customers, banks and their web
technology must be equally ready before IB-adoption can occur. Eight factors such as
Technology readiness, Banking service usage, Access and availability of resources, Risk and
adaptability, User friendly IB services, Security, Perceived convenience and Cost are
considered to evaluate their effects towards IB adoption through a survey.
This study presents the results of the initial test of the conceptual model of IB adoption with a
sample of retail banking customers who belong to different demographic segments in Sri
Lanka. Technology readiness has a statistically significant difference among different age
groups and Risk and adaptability, Access and availability of resources and Security shows a
statistical significance impact towards IB adoption. The above findings provide information
on consumer behavior in IB and this enables the banks to identify the motivating and the
deterrent factors in different customer segments. This would enable the banks to discover the
deterrent factors in different segments and to address them by introducing new strategies and
promotional programs to increase the IB usage.
