Competitive pressures, emergence of internet technology pressurized many of the Indian banks to undergo tremendous changes and offer technology based services to their customers. Especially innovative development in Information and Communication Technology resulted in the new dimensional Indian banks to offer banking services through electronic services and computerized manners which resulted in the dawn of ATM, Internet banking, Mobile banking summed up as Electronic Banking. Electronic Banking is a radical technological innovation with potential to change the structure and nature of banking from “bricks and mortar” into a “clicks and mortar”. There has been substantial growth in Internet Banking. Research on the reason for its growth has been few and apart though some of the research indicates adoption of internet banking depends on the competency, technical experience and self efficacy of the consumers. This has necessitated the need to research further for better understanding of the consumer’s usage and their satisfaction
|banking; information and communication technology (ICT); Electronic
Banking; Internet Banking;
|Competitive pressures, emergence of internet technology pressurized many of the
Indian banks to undergo tremendous changes and offer technology based services to
their customers. Especially innovative development in Information and Communication
Technology resulted in the new dimensional Indian banks. Now banks come to the
doorstep of the consumer, offering tailor-made banking solutions to the customer and
also go a step ahead day by day to operate their services every nuke and corner of
India. These situations pressurized the Indian banks to offer the banking services
through electronic services and computerized manners which resulted in the dawn of
ATM, Internet banking, Mobile banking.
|Internet banking (IB) is a radical technological innovation with potential to change the
structure and nature of banking from “bricks and mortar” into a “clicks and mortar”.
Internet Banking made a huge positive contribution in integrating Indian Banks with the
banking system of the rest of the world in a much faster and effective manner. (Internet
Banking In India, by GS Narayanan, http://ezinearticles.com/?Internet-Banking-In-
India&id=4956192) But usage rate of net banking highly depends upon the services
offered by the banks, factors influencing to using internet banking and knowledge of the
users to how to handle it properly. There has been substantial growth in Internet
Banking. Research on the reason for its growth has been few and apart though some of
the research indicates adoption of internet banking depends on the competency,
technical experience and self efficacy of the consumers. This has necessitated the need
to research further for better understanding of the consumer’s usage and their
REVIEW OF LITERATURE
|Bayus (1987) argued that technology usage skills and prior experience influences
customers’ eagerness in adopting new technologies. He also pointed out that next
generation of a technology has a positive influence on the usage when two technologies
are complimentary. DeLone, (1988) and Igbaria et al., (1995) research studies observe
that consumers' beliefs and attitude on information technology adoption is influenced by
previous technological skill or prior computer experience. Campeau et al, (1999) in their
research observed that new technology adoption is influenced by technology selfefficacy.
|Au et al. (2000) and Agarwal et al., (2000) assumed that understanding of new
technologies and technically skilled customers better understand their consequences
than others. Trocchia and Janda (2000) argued that users past experience and usage
competency with particular technologies is associated with consumers' adoption rate of
the Internet related technologies
|Jayawardhena and Foley (2000) argued that typical Internet banking user has been
identified as a high involved person, with good education and skill belonging to the upper
middle class. Lee and Lee (2001) employed the use of banking service as a proxy
variable indicating consumers’ need for banking service. They indicated that heavy users
of banking services might adopt Internet banking as a convenient option that can save
time and effort. However, if consumers have no experience of previous banking
technologies, they might find it hard to adopt recent banking technology. They might not
be comfortable and lack the confidence to use Internet banking, even though they think
Internet banking is necessary.
|Polatoglu and Ekin (2001) and Black et al. (2001) views are contradictory to each other.
While Polatoglu and Ekin record that well-educated people with familiarity in the Internet
and e-mail, would not find Internet banking to be complex and it is useful, Black argued
that consumer’s experience with computers and the complexity in conducting financial
transactions over the Internet was inversely related.
|Karjaluoto et al. (2002) also subscribed to the views in his research observations that
prior computer experience and skills such as excellence in handling internet, e-mail, and
e-payment had the most noteworthy impact on online banking usage. Technology
experience, such as ATM, e-ID, teletext, and automats, were significant factors for
attitude toward online banking among Finland bank consumers. Wang et al., (2003)
indicated that the individual differences in computer self-efficacy formed significant
positive effects on the behavioral intention to adopt Internet Banking through perceived
usefulness and ease of use.
|Gerrard and Cunningham (2003) studied the characteristics of online banking in
Singapore and found that computer experience or computer proficiency was an
influential factor for adoption of online banking. According to the study of Laforet and Li
(2005) perception of risks as well as lower level competency in computer and
technological skills are the main factors causing obstruction in online banking
|Guriting, Chunwen, Ndu, (2007) found that the strong determinants of the behavioral
intention to adopt internet banking are perceived usefulness and perceived ease of use.
Computer self-efficacy is an individual’s judgment of their computer competence. It is
emphasized that computer self efficacy reflects individual perceptions and abilities to
fulfill job requirements of computer competence, which is not related to practical
computer skills Computer self-efficacy focuses on an individual’s perceived ability in
computer related situations and refers to judgments of capacity to accomplish a
computer related job.
|Annamalah, Sanmugam, (2008) study results reveal that perceived usefulness,
perceived ease of use, and self efficacy have a significant association with intention to use Internet banking among Malaysian consumers. Murali Raman et, al .,(2008) results
show that Internet banking users and non-users have different expectation towards eservice
quality preferences. Analysis of variance in E-Service Quality Preferences
among Internet Banking Adopters (light, medium, and heavy users) does not vary. The
only difference is in the “incentive” variable preference. The medium and heavy users
might not need as much incentive as the light user. The medium and heavy users are
the early adopters who already rely and realize the importance of Internet banking. It is
different with light user where incentive should be given appropriately to them.
|Neha Dixit, Saroj K. Datta(2010) in their research observe that in spite of their security
and privacy concern, adult customers are willing to adopt online banking if banks provide
them necessary guidance which indicated that consumers who lack electronic banking
skill may slowly adopt internet banking and banks should take necessary steps to
upgraded their usage skills by the respective banks. Redelinghuis and Rensleigh(2010)
in their research in South Africa have concluded that even though value-adding
endeavors will ensure that customers experience and perception on their internet
banking experience to be enriching, lack of computer education and awareness
campaigns and diverse cultures and languages slowly impact the consumers to adopt
electronic banking activities.
|Elisha Menson Auta(2010) in her study in Nigeria shows that the customers have
security and , access concerns and no enough knowledge regarding e-banking services
rendered by banking sector in Nigeria, having a major negative effect in the usage of
internet banking. Wadie Nasri (2011) says that risk, security and prior internet
knowledge is also an important factor influencing customers adopting internet banking
RESEARCH OBJECTIVES AND HYPOTHESIS
|Similar to any technology driven product, internet banking has also varied responses
and preferences. The researcher attempts to understand if there exist any motivating
factors for internet usage and what is the competency level that motivates usage of
|India as a country is demographically highly varied country which leads to different levels
of internet banking usage. The researcher tries to find the relationship between
consumer’s level of competency and Internet banking usage frequency and the
association between consumers usage competency and their usage satisfaction
|The researcher used the structured questionnaire to obtain the research data from bank
customers of various banks located in Coimbatore district, Tamilnadu, India. The
convenience sampling method was used to capture the relevant information from the
users of net banking. A total of 300 questionnaires were randomly administered to
customers and 206 questionnaires turned to be valid data, which comprised of frequent
and infrequent users of internet banking. Data obtained from questionnaire were
analyzed using simple percentage analysis and one-way analysis of variance. SPSS package was used for data compilation and analysis, while descriptive statistics were
computed and used in the interpretation of findings.
Demographic profile of the respondents
|The sample size of 206 internet banking service users includes 116(56.31%) male and
90 (43.69%) female. In which 54.32 %( 44) female consumers and 45.68% (37) male
samples were having beginners level knowledge in handling net banking which
accounted as 81. Among 114 moderate users of net banking, 66.67% of them were male
and 33.33% of respondents were female net banking users. Out of 11 excellent users
72.73% of them were female consumers and 27.27% of the net banking users were
|Out of 206 samples, 34(40%) of the beginners, 47(55.29%) of the moderate and
4(4.71%) of the samples are having excellence in internet banking, residing in urban
areas which accounted as 85. Out of 88 semi urban residents, 44(50%) of them were
having moderate internet banking knowledge, followed by 39(44.32%) of them were
learners of internet banking related activities whereas 5(5.68%) of them opined that they
having excellent knowledge in handling internet banking related activities. Among 33
rural respondents, 23(69.70%) of them were average level proficient’s in electronic
banking, followed by 8(24.42%) and 2(6.06%) of them were having beginners and
excellent knowledge in using electronic related banking activities.
|The study reveals that 22(48.89%) of the beginners, 19(42.22%) of the moderators and
4(8.89%) of the excellent users of internet banking fall in the age category of below 21
years which accounted as 45 responses. 53(60.23%) of the moderate internet banking
users, followed by 36.63% of the beginners and 3.41% of the excellent users were in the
age group of 21-30 years.
|Among 31 to 40 years old consumers(55 samples) , 60% of the internet banking users
were only having average knowledge on electronic banking, followed by 32.73% of them
were beginners where as only 7.27% of the samples were excellent in using internet
banking. Out of 15 samples who fell in the age category of 41 – 50 years, 53.33% of
them were moderate users and 46.67% of them were beginners of internet banking
activities. Out of 206 consumers, only 3 of them were in the age of above 51 years which
include 66.67% of the beginners and 33.33% of them technically strong in dealing with
Motivational factors for choosing internet banking amongst beginners, moderate
users and excellent users of net banking
|Growth and usage of internet banking in a country depends on many factors, such as
success of internet access, motivation features, household growth of internet usage,
legal and regulatory framework and consumer’s usage skills. Net-banking can offer
numerous benefits which in turn motivate individual consumers to adopt or quit the net
|In this study researcher assessed the beginners, moderate and excellent users of net
banking view about the factors motivating to choose the net banking services. For this
the researcher considered the factors like anywhere at any time, ease of use, additional
benefits, safety and security, quick direct access of banking services, cost effectiveness and status symbol to the customers for which they may be relatively satisfied than that of
manual system of banking. Among the seven factors, which factor influenced and
motivated the beginners, moderate and excellent net banking consumers, was analyzed
using one-way ANOVAS by the researcher.
|Hypothesis 1: There is no significant difference between internet banking usage
competency and motivating factors
|The framed hypothesis is fully rejected as it expounds that there is significant difference
between mean of internet banking usage competency and motivating factors. Various
usage competent consumers are influenced by different motivating factors during the
time of choosing net banking. From the descriptive analysis, it is evident that the
excellent users were influenced by cost effectiveness, quick direct access of banking
services, additional benefits, ease of use and any time at anywhere whereas status
symbol and safety & security were more considered by the beginners of net banking.
Frequency of internet banking usage and consumer internet banking competency
|The table depicts that 66.67% of the beginners were occasional users of internet
banking, followed by 16.05% of them were once in a month users whereas 7.41% and
6.17% of the beginners were once in a week and fifteen days once users of net banking
respectively and once in a day users were only 3.70%. Among 114 moderate users,
fifteen days once users and monthly one time users were very less which accounted as
4.39% , once in a day users(21.05%) were slightly lower than once in a week
users(23.68%) whereas 46.49% of the average users were only occasional users.
|Among 11 excellent users, occasional users are slightly higher than the other frequency
of users which is accounted as 45.46%. Once in a day, week and fifteen days users
were accounted as 54.54%. Further, in order to find the degree association between
consumers e-banking usage competency and frequency of usage of various e-banking
services, cross tabulation were performed.
|It is highlighted from the above table 3 that 66.67% of the beginners, 46.49 % of the
moderate competent and also 45.45% of the excellent competent were infrequent users
of Internet banking. Out of 11 excellent users, each two samples usage frequency fall in
the once in a day, once in a week, once in fortnight respectively.16.05% of the beginner
using their Internet banking services once in a month while 23.68% of the moderate
usage competency consumers using their respective banks internet bank service once in
|Hypothesis 2: There is no significant relationship between consumer’s level of
competency and Internet banking usage frequency. Since the chi-square value is 0.00,
which is lesser than the 0.005, the hypothesis was rejected. As a result it can be
concluded that, there is good association between consumer’s level of competency and
their frequency of internet banking usage.
|In order to find the relationship between consumer’s usage competency and frequency
of using internet banking, a Chi-square test was performed and the result of the test is
shown in the table 3.
Consumer e-banking usage competency and usage satisfaction
|Table 4 shows that e-banking consumers rating about their usage competency on
Internet banking services offered by their respective banks. 55.34% (114) samples were
opined that they have moderate knowledge and competency in handling of internet
banking services, followed by 39.32%(81) respondents were novice consumers whereas
meager 5.34%(11) of the respondents consider them as excellent competent in handling
internet banking services like online transaction, e-purchase and e-payment , e-ticketing
|In order to find the significant difference between the e-banking usage competency and
usage satisfaction perceived by the e-banking users, an ANOVA test was performed and
the result of the test is shown below.
|Hypothesis 3: There is no significant difference between internet banking users’
competency and usage satisfaction
|The F value 5.05 for the mean difference in usage satisfaction between various usage
competency of e-banking consumers is significant (p<0.005). It emphasis that there is
significant difference between e-banking usage competency of the consumers and
usage satisfaction. The post hoc test reveals that excellent users of various e-banking
operations have more satisfaction than their other counterparts: Moderate and beginners
level competency. Hence, the hypothesis is not accepted.
FINDINGS AND CONCLUSION
|The test results indicate that users were influenced by factors such as quick direct
access, ease of use, anytime anywhere banking, status symbol, safety & security. The
influence of the factors varied from the type of users.
|Consumers have different levels of competency in internet banking usage. The higher
the consumers felt about their competency in handling internet banking, higher was their
frequency in usage of internet banking. Also highly competent internet banking users
had high levels of usage satisfaction. Moderate and novice of internet banking users
had relatively lesser levels of usage satisfaction.
|In the current scenario Indian customers are moving towards Internet banking, slowly but
steadily. Most of the Indian banks have started providing Internet banking services. But
success rate of electronic banking depends on the various aspects of banking services
and motivating factors of consumers to choose internet banking. Here researcher
classified the customer into three groups on the basis of opinion about internet banking
competency – excellent users, moderate users and beginners. From this, majority of the
respondents were occasional users and chi-square test results indicate that frequency of
net banking usage associates with user’s competency.
|Further moderate users and beginners were more occasional user than the excellent
users of net banking. Once in a day and weekly users have moderate knowledge which
is slightly higher than the other two categories. In the entire age category consumer with
excellent skill in net banking is very lesser than other two group. It means that all the age
group of samples are having average and beginners level knowledge in using net
|Internet-banking service is considered a new era in banking, which banks spend
considerable amount of money on it to make it available to their customers at their
nearest location. Reach each and every user of banking and offer value added services,
many of the Indian banks are locating their branches and services even in tiny villages of
India. But usage rate highly differ on the basis of competency of handling electronic
aspects of banking .This study evidences that excellent users of internet banking were
very less in urban, semi-urban and rural areas whereas consumers with moderate
knowledge are slightly higher than the novice consumers who currently live in urban,
semi-urban and rural area.
|Anywhere at any time, Ease of use, Additional benefits, Quick direct access of banking
services and Cost effectiveness features were more considered by excellent users
whereas Status symbol, safety and security were more considered by the beginners of
net banking at the time of choosing net banking facilities. Further, excellent users of net
banking operations have more satisfaction than moderate users and beginners of net
banking. Hence, lack of usage competency could be one of the factors for having a low
rate of net banking usage and satisfaction. Hence it is strongly believed that
continuously educating, training the banking customers with how to use the net banking
services will definitely increase the rate of using Internet Banking services and
satisfaction. This means that banks need to ensure their Internet Banking systems are
well secured, reliable and user-friendly, and need to better promote and familiarize their
customers about the Internet Banking.
Tables at a glance
- Agarwal, R., Sambamurthy, v. & Stair, R. M. (2000) Research Report: The EvolvingRelationship Between General and Specific Computer Self- Efficacy-An EmpiricalAssessment. Information Systems Research, VOL.11, NO.4, 418-430.
- Agarwal, R., Sambamurthy, V., and Stair, R.M. (2000). Research Report: the Evolving Relationshipbetween General and Specific Computer Self-Efficacy-an Empirical Assessment. Information Systems Research, 11 (4), 418-30.
- Bayus, B. L. (1987). Forecasting sales of new contingent products: An application to thecompact disc market. Journal of Product Innovation Management, 4(December),243-255.
- Black, N.J., Lockett, A., Winklhofer, H., &Ennew, C. (2001). The adoption of Internetfinancial services: A qualitative study. International Journal of Retail &Distribution Management, 29(8), 390-398.
- Chou, D., and Chou, A.Y. (2000). A Guide to the Internet Revolution in Banking. Information Systems Management, 17 (2), 51-7.
- Compeau, D.R., Higgins, C.A. and Huff, S. (1999) Social Cognitive Theory andIndividual Reaction to Computing Technology: A Longitudinal Study, MISQuarterly, 23, 2, 145-158.
- Gerrard, P., and Cunningham, J.B. (2003). The Diffusion of Internet Banking among Singapore consumers. International Journal of Bank Marketing, 21 (1), 16-28.
- Guriting, G., Chunwen, G., Ndu, N. N. O. (2007). Computer self-efficacy levels,perceptions and adoption of online banking. International Journal of ServicesTechnology and Management, 8(1), 54-61.
- Hong, W., Thong, J.Y.L., Wong, W.M., and Tam, K.Y. (2001). Determinants of UserAcceptance of Digital Libraries: An Empirical Examination of IndividualDifferences and System Characteristics. Journal of Management InformationSystems, 18(3), 97-124.
- Igbaria, M. &Iivari, J. (1995) The Effects of Self-efficacy on Computer Usage. Omega,International Management Science, VOL.23, NO.6, 587-605.
- Johnson, R.D., and Marakas, G.M. (2000). Research Report: the Role of Behavior Modeling in Computer Skills Acquisition-Toward Refinement of the Model. Information Systems Research, 11(4), 402-417.
- Laforet, S. and Li, X., (2005), ?Consumers? attitudes towards online and mobile bankingin China? International Journal of Bank Marketing, Vol. 23 No. 5, pp. 362-380.
- Karjaluoto, H., Mattila, M., &Pento, T. (2002). Factors underlying attitude formationtowards online banking in Finland. International Journal of Bank Marketing, 20(6),261-272.
- Lee, E., & Lee, J. (2001). Consumer adoption of Internet banking: Need-based and/orskill based? Marketing Management Journal, Spring.
- Polatoglu, V.N. &Ekin, S. (2001). An empirical investigation of the Turkish consumers?acceptance of Internet banking services. International Journal of Bank Marketing,19(4), 156-165.
- SomkiatMansumitrchai, Husam-Aldin N. AL-Malkawi (2011) International Journal ofBusiness and Management Vol. 6, No. 9; September 2011 , 155 ? 169 .
- ZaighamMahmood Attitudes towards the use of E-banking: Result of a Pilot Survey, Communications of the IBIMA ,Volume 8, 2009 170 ? 174.
- ThamaraiSelvan N,.SenthilArasu B, Sivagnanasundaram M, Role Of Existing ChannelsOn Customer Adoption Of New Channels: A Case Of ATM and Internet Banking,EJISDC (2011) 45, 1, 1-15.
- Wang, Y., Wang, Y., Lin, H., and Tang , T. (2003). Determinants of User Acceptance of Internet Banking: An Empirical Study. International Journal of Service Industry Management, 14 (5), 501-19.