Academic journal article International Journal of Marketing Studies

Applying Logistic Regression to E-Banking Usage in Kumasi Metropolis, Ghana

Academic journal article International Journal of Marketing Studies

Applying Logistic Regression to E-Banking Usage in Kumasi Metropolis, Ghana

Article excerpt


Purpose: The main focus of this paper is to ascertain whether customer's decision to use e-banking is influenced by socioeconomic classifications. It further seeks to identify the kinds of e-banking services provided to customers, and also examines the most frequently patronized e-banking service.

Methodology/approach: In all, 241customers of three state-owned retail banks from Kumasi Metropolis, one of the most urbanized metropolis in Ghana, were used as sample for the survey. A well-structured questionnaire was used to obtain relevant information from the customers. Responses gathered from the customers were mainly analyzed using a binary logistic regression.

Findings: Internet banking, ATM, E-Zwich and mobile phone banking were the commonly identified e-banking services offered by the banks. Among such services, ATM was the most frequently patronized service whereas internet banking recorded very low patronage. From the chi-squared test of association, customer's operational bank and occupational status were found to have significantly informed the decision to use e-banking. With respect to the logit analysis, customer's operational bank, occupational status and monthly income were significant socioeconomic classification variables that informed customer's decision to use e-banking.

Practical implications: This paper may serve as scientific basis for banks to consider customers' socioeconomic classifications, in designing any e-banking marketing strategies in targeting customers in urban communities in Ghana.

Originality/value: With the use of a logit regression, this paper has identified occupational status, customer's bank and monthly income as significant socioeconomic variables that inform a Ghanaian customer's decision to use e-banking.

Keywords: socioeconomic, binary regression, e-banking, Ghana

(ProQuest: ... denotes formulae omitted.)

1. Introduction

Globalisation and rapid technological advancement in Information and Communication Technology (ICT) has generally brought vigorous transformation and competition into the banking industry. According to Tandrayen-Ragoobur and Ayrga (2011), with rising globalisation, as well as fierce competition and technological developments, the trading and investment environment have changed dramatically over the years. This progress in ICT has directly or indirectly affected the way every organization performs its business. Gallivan (2004) stated that changes in technology do affect the routine activities of professionals, managers and everyone in the structural setup of organizations. A number of studies have concluded that information technology has appreciable positive effects on bank's productivity; cashiers' work, banking transaction, bank patronage, and bank services delivery to customers (Hunter & Stephen, 1991; Yasuharu, 2003). The banking industry in Ghana has seen a dynamic change in recent years, not only in the minimum set-up capital for the banks, but also in the way the banks transact businesses. The banking industry is constantly responding to changes in customer preferences and needs; increasing competition from non-banking institutions, changes in demographic and social trends, information technology advancement, channel strategies, and government deregulations of the financial service sector (Giannakoudi, 1999; Byers & Lederer, 2001).

The continual development or advancement in technology has brought a new way of transacting businesses in the banking industry through electronic means. This act of banking via electronic channels is popularly termed as electronic banking or simply put, e-banking. The evolution of e-banking into the banking industry has fundamentally transformed the means by which banks traditionally conduct their businesses, and has also redirect the manner in which consumers transact their banking activities (Sayar & Wolfe, 2007; Eriksson et al., 2008;). E-banking can be simply defined to mean a process where banks create platform for its customers to generally access information and to transact businesses electronically through an electronic device without necessarily being present at the bank. …

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