Academic journal article Researchers World

Factors Influencing the Behavioural Intention to Adopt Internet Banking: An Empirical Study in India

Academic journal article Researchers World

Factors Influencing the Behavioural Intention to Adopt Internet Banking: An Empirical Study in India

Article excerpt


Internet banking provides huge benefits to banks' in cost savings, improved customer relationships and differentiating their offerings from competitors. Although the Internet banking services were introduced in India for more than a decade ago, the adoption among the bank customers is still very low. This study aims to identify the factors that are significantly influencing the bank customers intention to use Internet banking services in India. The research proposed a comprehensive model called 'Internet banking Acceptance in India', constructs of which were developed based partially on the Unified Theory of Acceptance and Use of Technology (UTAUT) and three additional variables as identified to be context-specific. The data presented in this study are based on 325 questionnaires collected from individual bank customers' in Hyderabad city. The empirical findings of the study confirms the relationships between the identified latent variables and their impact on the adoption of Internet banking services. The proposed model explained about 67% of the variance in behavioural intention to adopt the Internet banking in India. This study contributes to the literature by providing a new research framework for predicting Internet banking adoption in India and its findings provide useful insights for bank managers and policy makers in planning Internet banking promotion strategies.

Keywords: Behavioural Intention, UTAUT, Trust, Awareness, Attitude.


With the advent of Information technology, the way individuals and business are performing various activities have changed over the last two decades worldwide. The Internet users have been rapidly growing, as a new avenue of performing tasks like communication, shopping, banking, etc. According to Internet World Stats (2012), there are approximately 2.4 billion Internet users across the world against 361 million in the year 2002, with a growth rate of 566.4%. Further, it was reported that there were around 137 million Internet users in India with the penetration of only 11.4% of the population (Internet World Stats, 2012).

Internet technology has undoubtedly redefined the way the products and services are designed, communicated and delivered to the customers. For a marketer, the Internet has provided innumerable opportunities to understand and serve the customers better than rivals in the Industry. For example, the Internet has enabled most of the firms to save a considerable amount of money, by having personalized communication and delivering their products and services online. Most of the firms have been using hybrid channels (a combination of physical and virtual channels) to reach different customer segments, expanding their market coverage globally. This impact of the Internet is evident in almost all industries, including banks in India. Many banks in India have established their presence online, thus providing their customers the convenience of banking "anytime, anywhere?. With the rapid diffusion of the Internet, banks now can add more value to their customers through their innovative banking channels and differentiate their offerings from competitors.

Internet banking is a platform where bank customers can perform various activities such as balance enquiry, fund transfer, request for bank statement, etc. which were traditionally performed in branch banking. There are numerous benefits for the banks and the customers through offering banking services online. For instance, it was estimated that branch banking costs about Rs.1 per transaction, Automated Teller Machines (ATMs) cost only 45 paise whereas Internet banking at 10 paise per transaction. This results not only in cost savings but also efficient and effective services quality. And for customers, it is possible to perform most of the banking transactions online without visiting the physical bank branch, at any time and in any place. In India, the banking services provided by the banks? …

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