AN EMPIRICAL ANALYSIS OF FACTORS AFFECTING INTERNET BANKING ADOPTION IN PAKISTAN

Malik Mamoon Munir, Muhammad Ayub Siddqui

Abstract


The study has attempted to identify empirically the factors responsible for Internet Banking (IB) adoption in Pakistan. Field research was conducted for utilizing personally administered questionnaire technique of data collection six major cities of Pakistan namely Islamabad, Rawalpindi, Lahore, Karachi, Quetta and Peshawar. Eleven-Hundred (1,100) banking customers were approached to fill the questionnaire. However, only 773 customers correctly provided useful responses for further data analysis. Binomial Logistic Regression (Polasik & Wisniewski, 2009) technique was used for investigating the impact of factors namely security, trust, product knowledge, level of education, and awareness of Internet on IB adoption in Pakistan.   

Results indicated that behavior of Pakistani banking customers is similar to the rest of the world banking customers towards adoption of the IB product/service. However, the significance of the tested hypothesis highlighted that the factors affecting IB adoption decisions in Pakistan mainly consists of security, trust, product knowledge, level of education, and awareness of Internet.


Keywords


Internet Banking, Security, Trust, Behavior, Competitive Advantage, Pakistan

References


Abbasi, M., Chandio, F. H., Soomro, A., & Shah, F. (2011). Social influence, voluntariness, experience and the internet acceptance: An extension of technology acceptance model within a south-Asian country context. Journal of Enterprise Information Management , 24(1), 30-52.

Acharya, R., Kagan, A., & Lingam, S. (2008). Online banking applications and community bank performance. International Journal of Bank Marketing, 26(6), 418-239.

Ahmad, M., Rashid, S., & Mujeeb, E. (2012). ECRM and customers: a case of Askari Commercial Bank, Pakistan. Business Strategy Series, 13(6), 323-330.

Ahmed, A. (2006). Policies and regulations for expanding e-banking to the poor. The First Micro Finance Bank Ltd, 24(1), 1-8.

Ahmed, A., Zairi, M., & Alwabel, S. (2006). Global Benchmarking for internet and e-commerce applications. An International Journal, 13(1), 68-80.

Akhlaq, A., & Ahmed, E. (2013). The effect of motivation on trust in the acceptance of internet banking in a low income country. International Journal of Bank Marketing, 31(2), 115-125.

Aldás-Manzano, J., Lassala-Navarré, C., Ruiz-Mafé, C., & Sanz-Blas, S. (2009). Key drivers of internet banking services use. Online Information Review, 33(4), 672–695.

Aliyu, A.A., Rosmain, T., & Takala, J. (2014). Online Banking and Customer Service Delivery in Malaysia: Data Screening and Preliminary Findings. Procedia - Social and Behavioral Sciences, 129, 562-570.

Apak, S., Tuncer, G., Atay, E., & Kosan, N.I. (2012). Insights From Knowledge Management to Radical Innovation: Internet Banking Applications in the European Union. Procedia - Social and Behavioral Sciences, 41, 45–50.

Bonsón-Ponte, E., Escobar-Rodríguez, T., & Flores-Muñoz, F. (2006). Online transparency of the banking sector. Online Information Review, 30(6), 714–730.

Bose, R., Luo, X.R., & Liu, Y. (2013). The Roles of Security and Trust: Comparing Cloud Computing and Banking. Procedia - Social and Behavioral Sciences, 73, 30-34.

Bradley, L., & Stewart, K. (2003). A Delphi study of Internet banking. Marketing Intelligence and Planning, 21(5), 272-281.

Bynner, J. (1998). Education for what?. Education + Training, 40(1), 4–5.

Cabanillas, F.L., Nogueras, R., Herrera, L.J., & Guillen, A. (2013). Analysing user trust in electronic banking using data mining methods. Expert Systems with Applications, 40(14), 5439-5447.

Casaló, L., Flavián, C., & Guinalíu, M. (2008). The role of satisfaction and website usability in developing customer loyalty and positive word-of-mouth in the e-banking services. International Journal of Bank Marketing, 26(6), 399-417.

Çelik, H. (2008). What determines Turkish customers' acceptance of internet banking?. International Journal of Bank Marketing, 26(5), 154-169.

Chong, A.-L., Ooi, K.-B., Lin, B., & Tan, B.-I. (2010). Online banking adoption: an empirical analysis. International Journal of Bank Marketing, 28(4), 267–287.

Daneshgadeh, S., & Yildirim, S.O. (2014). Empirical Investigation of Internet Banking Usage: The Case of Turkey. Procedia Technology, 16, 322-331.

Davis, F. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319-340.

Dimitriadis, S., Kouremenos, A., & Kyrezis, N. (2011). Trust-based segmentation: Preliminary evidence from technology-enabled bank channels. International Journal of Bank Marketing, 29(1), 5-31.

Eriksson, K., Kerem, K., & Nilsson, D. (2008). The adoption of commercial innovations in the former Central and Eastern European markets: The case of internet banking in Estonia. International Journal of Bank Marketing, 26(3), 154–169.

Flavián, C., Guinalíu, M., & Torres, E. (2006). How bricks-and-mortar attributes affect online banking adoption. International Journal of Bank Marketing, 24(6), 406-423.

Fonseca, J.R.S. (2014). E-banking culture: A comparison of EU 27 countries and Portuguese case in the EU 27 retail banking context. Journal of Retailing and Consumer Services, 21(5), 708-716.

Gan, C., Clemes, M., Limsombunchai, V., & Weng, A. (2006). A logit analysis of electronic banking in New Zealand. International Journal of Bank Marketing, 24(6), 360–383.

Gerrard, P. and Cunningham, J. (2003), “The diffusion of Internet banking among Singapore consumers”, International Journal of Bank Marketing , Vol. 21 No.1, pp.16–28.

Gerrard, P., Cunningham, J., & Devlin, J. (2006). Why consumers are not using internet banking: a qualitative study. Journal of Services Marketing, 20(3), 160–168.

Gounaris, S., & Koritos, C. (2008). Investigating the drivers of internet banking adoption decision: A comparison of three alternative frameworks. International Journal of Bank Marketing, 26(5), 282-304.

Grabner-Kräuter, S., & Faullant, R. (2008). Consumer acceptance of internet banking: the influence of internet trust. International Journal of Bank Marketing, 26(7), 483–504.

Hanafizadeh, P., Behboudi, M., Koshksaray, A.a., & Tabar, M.J.S. (2014). Mobile-banking adoption by Iranian bank clients. Telematics and Informatics, 31(1), 62-78.

Hanafizadeh, P., Keating, B.W., & Khedmatgozar, H.R. (2014). A systematic review of Internet banking adoption. Telematics and Informatics, 31(3), 492–510.

Ho, C.-T., & Lin, W.-C. (2010). Measuring the service quality of internet banking: scale development and validation. European Business Review, 22(1), 5–24.

Hosmer, D., & Lameshow, S. (1989). Applied Logistic Regression. New York, NY: John Willey and Sons.

Hutchinson, D., & Warren, M. (2003). Security for Internet banking: a framework. Logistics Information Management, 16(1), 64-73.

Jaruwachirathanakul, B., & Fink, D. (2005). Internet banking adoption strategies for a developing country: the case of Thailand. Internet Research, 15(3), 295–311.

Jayawardhena, C., & Foley, P. (2000). Changes in the banking sector – the case of Internet banking in the UK. Internet Research, 10(1), 19-30.

Kolodinsky, J. M., Hogarth, J. M., & Hilgert, M. A. (2004). The adoption of electronic banking technologies by US consumers. International Journal of Bank Marketing, 22(4), 238-259.

Kundi, G., & Shah, B. (2009). IT in Pakistan: Threats and Opportunities for E Business. The Electronic Journal on Information Systems in Developing Countries, 36(8), 1-31.

Laforet, S., & Li, X. (2005). Consumers' attitudes towards online and mobile banking in China. International Journal of Bank Marketing, 23(5), 362–380.

Laukkanen, T. (2007). Customer preferred channel attributes in multi-channel electronic banking. International Journal of Retail and Distribution Management, 35(5), 393–412.

Lee, J.H., Lim, W.G., & Lim, J.I. (2013). A study of the security of Internet banking and financial private information in South Korea. Mathematical and Computer Modelling, 58(1–2), 117–131.

Lettice, F., Roth, N., & Forstenlechner, I. (2006). Measuring knowledge in the new product development process. International Journal of Productivity and Performance Management, 55(3), 217-241.

Liu, D.-Y., Chen, S.-W., & Chou, T. (2011). Resource fit in digital transformation: Lessons learned from the CBC Bank global e-banking project. Management Decision, 49(10), 1728–1742.

Loonam, M., & O'Loughlin, D. (2008). Exploring e-service quality: a study of Irish online banking. Marketing Intelligence and Planning, 26(7), 759–780.

Lu, M.-T., Liu, C.-H., Jing, J., & Huang, L. (2005). Internet banking: strategic responses to the accession of WTO by Chinese banks. Industrial Management and Data Systems, 105(4), 429–442.

M.A. (2004). The adoption of electronic banking technologies by US consumers. International Journal of Bank Marketing, 22(4), 238–259.

Martins, C., Oliveira, T., & Popovic, A. (2014). Understanding the Internet banking adoption: A unified theory of acceptance and use of technology and perceived risk application. International Journal of Information Management, 34(1), 1–13.

Masrek, M.N., Mohamed, I.S., Daud, N.M., & Omar, N. (2014). Technology Trust and Mobile Banking Satisfaction: A Case of Malaysian Consumers. Procedia Social and Behavioral Sciences, 129(15), 53–58.

Masrek, M.N., Mohamed, I.S., Daud, N.M., & Omer, N. (2014). Technology Trust and Mobile Banking Satisfaction: A Case of Malaysian Consumers. Procedia - Social and Behavioral Sciences, 129, 53-58.

Mathur, L., Mathur, I., & Gleason, K. (1998). Services advertising and providing services on the Internet. Journal of Services Marketing, 12(5), 334–347.

Meulen, N.S.V.D. (2013). You've been warned: Consumer liability in Internet banking fraud. Computer Law & Security Review, 29(6), 713-718.

Mohammadi, H. (2015). A study of mobile banking loyalty in Iran. Computers in Human Behavior, 44, 35-47.

Mols, N. (2000). The Internet and services marketing - the case of Danish retail banking. Internet Research, 10(1), 7–18.

Montazemi, A.R., & Qahri-Saremi, H. (2015). Factors affecting adoption of online banking: A meta-analytic structural equation modeling study. Information & Management, 52(2), 210–226.

Montazemi, A.R., & Saremi, H.Q. (2015). Factors affecting adoption of online banking: A meta-analytic structural equation modeling study. Information & Management, 52(2), 210-226.

Ndubisi, N., & Sinti, Q. (2006). Consumer attitudes, system's characteristics and internet banking adoption in Malaysia. Management Research News, 29(1), 16–27.

Nor, K., Sutanonpaiboon, J., & Mastor, N. (2010). Malay, Chinese, and internet banking. Chinese Management Studies, 4(2), 141-153.

Normalini, M.K., & Ramayah, T. (2012). Biometrics Technologies Implementation in Internet Banking Reduce Security Issues?. Procedia-Social and Behavioral Sciences, 65(3), 364–369.

Patrício, L., Fisk, R., & Cunha, J. (2003). Improving satisfaction with bank service offerings: measuring the contribution of each delivery channel, Managing Service Quality, 13(6), 471–482.

Pikkarainen, T., Pikkarainen, K., Karjaluoto, H., & Pahnila, S. (2004). Consumer acceptance of online banking: an extension of the technology acceptance model. Internet Research , 14(3), 224–235.

Polasik, M., & Wisniewski, T. (2009). Empirical analysis of internet banking adoption in Poland. International Journal of Bank Marketing, 27(1), 32–52.

PTA. (2015). Retrieved Feb 13, 2015, from Pakistan Telecom Authority official website: http://www.pta.gov.pk/index.php?Itemid=599.

Reis, Z.A., Gülseçen, S., & Bayrakdar, B. (2011). To develop an education system for secure internet banking: GIBES. Procedia Computer Science, 3, 1333-1340.

Rogers, E. (1962). Diffusion of Innovations. New York, NY: The Free Press.

Sathye, M. (1999). Adoption of Internet banking by Australian consumers: an empirical investigation. International Journal of Bank Marketing, 17(7), 324–334.

Shah, M., & Clarke, S. (2009). E-Banking Management: Issues, Solutions and Strategies. New York: Hershey.: Information Science Reference (an impact of IGI Global).

Shaikh, A.A., & Karjaluoto, H. (2015). Mobile banking adoption: A literature review. Telematics and Informatics, 32(1), 129-142.

Sharma, P., & Maleyeff, J. (2003). Internet education: potential problems and solutions. International Journal of Educational Management, 17(1), 19–25.

Smith, A. (2009). Internet retail banking: A competitive analysis in an increasingly financially troubled environment. Information Management and Computer Security, 17(2), 127–150.

Subsorn, P., & Limwiriyakul, S. (2012). A Comparative Analysis of Internet Banking Security in Thailand: A Customer Perspective. Procedia Engineering, 32, 60–272.

Vrabiuta, M. (2014). Customer Education Revolution – A Managerial Approach. Procedia - Social and Behavioral Sciences, 116, 4401-4405.

Wong, D., Rexha, N., & Phau, I. (2008). Re-examining traditional service quality in an e-banking era. International Journal of Bank Marketing, 26(7), 526–545.

World Bank. (20152). Retrieved FebNov 1301 , 20152, from World Bank National Accounts Data, and OECD National Accounts Data Files: http://datafinder.worldbank.org/gdp.

Yoon, H.S., & Steege, L.M.B. (2013). Development of a quantitative model of the impact of customers’ personality and perceptions on Internet banking use. Computer in Human Behavior, 29(3), 1133-1141.




DOI: http://dx.doi.org/10.22555/pbr.v17i3.309

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.