An examination of the critical factors affecting consumer acceptance of online banking. A focus on the dimensions of risk

Published date15 March 2013
DOIhttps://doi.org/10.1108/13287261311322602
Date15 March 2013
Pages97-116
AuthorDimitrios Maditinos,Dimitrios Chatzoudes,Lazaros Sarigiannidis
Subject MatterInformation & knowledge management
An examination of the critical
factors affecting consumer
acceptance of online banking
A focus on the dimensions of risk
Dimitrios Maditinos
Department of Business Administration,
Technological Educational Institute of Kavala, Kavala, Greece
Dimitrios Chatzoudes
Department of Production and Management Engineering,
Democritus University of Thrace, Xanthi, Greece, and
Lazaros Sarigiannidis
Department of Business Administration,
Technological Educational Institute of Kavala,
Kavala, Greece
Abstract
Purpose – The recent advances in the technology of electronic banking have helped develop new
ways of handling banking affairs, especially through online banking. Moreover, the rapid
development of the internet has stimulated the banking sector towards encouraging customers to
make their transactions online. The purpose of this paper is to introduce an extended technology
acceptance model (TAM) model as a tool for examining the factors that have a significant impact on
customers’ online banking acceptance.
Design/methodology/approach – The typical TAM constructs were enhanced with the variables
of perceived risk and quality of the internet connection. The proposed conceptual framework of the
study (extended TAM), was tested on a sample of Greek internet users. Data were analysed using the
“structural equation modelling” technique.
Findings – Results provide overall support for the extended TAM model and confirm its robustness
in predicting customers’ intention of adoption of internet banking. More specifically, results
underlined the important impact of perceived usefulness, security risk and performance risk on the
intention to use internet banking. On the contrary, the impact of perceived ease of use and quality of
the internet connection seemed to have only an indirect effect on internet banking adoption.
Practical implications – The paper makes an analytical effort in order to point out areas that
banking organisations should emphasize in order to successfully implement online banking and,
therefore, harvest its potential benefits.
Originality/value – The paper proposes an enhanced conceptual framework (extended TAM) that
examines vital issues concerning online banking acceptance, thus providing valuable outcomes for
decision makers and academics. To the best of the researchers’ knowledge, such an extension of the
TAM model has never been examined in the relevant literature. Moreover, the results of the study may
be generalised in other developed countries whose financial sector faces significant challenges
(e.g. Spain, Italy, Portugal, Ireland, etc.).
Keywords Consumer behaviour,Internet, Banking, Online banking,Perceived risk,
Technology acceptance model, Structuralequation modelling, Greece
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1328-7265.htm
Journal of Systems and Information
Technology
Vol. 15 No. 1, 2013
pp. 97-116
qEmerald Group Publishing Limited
1328-7265
DOI 10.1108/13287261311322602
Acceptance of
online banking
97
1. Introduction
Nowadays,the internet technologyis rapidly changingthe design and deliveryof financial
services. Online services offer consumers a number of information-related benefits
that favour adoption. These benefits include the opportunity to control bank accounts
at any time and place, the access to personalised information for taking investment
decisions and the comparison between alternate services (Howcroft et al., 2002).
Internetbanking, definedas the deliveryof banking servicesthrough the internet,offers
numerous potential benefits to implementing financial organisations (Howcroft and
Durkin, 2000; O’Reilly and Finnegan, 2003), especially through the utilisation of user
friendlytechnologiesand the lack of restrictionto physical locationsor geographicalareas.
It is considered to enhance customer satisfaction by providing faster, easier and more
reliableservices throughan online platform(Al-Somaliet al., 2009; Pikkarainen et al., 2004).
Nevertheless, despite the advantages of online banking, there is still a large
customer group refusing to adopt such services, mainly, due to security reasons
(Kuisma et al., 2007; Littler and Melanthiou, 2006). Therefore, the understanding of
these reasons is expected to be proven useful for bank managers when formulating
strategies that aim at increasing the use of online banking (Jarvenpa a et al., 1999; Lee,
2009; Yiu et al., 2007). Despite the risk related inefficiencies, online banking is clearly a
potentially rich research context (AbuShanab and Pearson, 2007; Ndubisi and Sin ti,
2006; Shanmugam and Guru, 2000).
Several empirical studies have focused on the factors that have an impact on the
adoption of information or internet technology (Chan and Lu, 2004; Ndubisi and Sinti,
2006; Sachan and Ali, 2006; Wan et al., 2005), but there is limited empirical research
considering the nature of internet adoption in the banking sector of Greece, nor analyse
the success factors that may help in forming a strategic internet banking agenda in the
whole country.
Until the end of the 1980s, the Greek banking system was characterised by selective
credit controls and regulations that gradually led to unprecedented distortions and
inefficiencies. Since then, the landscape of the Greek banking system has altered
significantly. It underwent substantial developments that increased its potential
(integrationto the Economic and MonetaryUnion and introduction of theEuro currency).
Online banking has the potential to play an important role in the financial success of
Greek Banks. Especially during the current global financial crisis, Greek banks have
extra reasons to encourage their customers to increase the use of online banking, since
through its implementation banks will be able to cut extra costs, reduce the number of
branch employees and trim transportation expenditures. Furthermore, given the low
percentages of online banking penetration in Greece, there is a significant gap for
online banking development.
Given the above considerations, the present empirical study develops and tests a
theoretical extension of the technology acceptance model (TAM) (Davis, 1989), and
examines the factors that influence the adoption and acceptance of online banking in Greece.
To empirically test the validity of the proposed conceptual framework (extended
TAM), a newly developed structured questionnaire was distributed to a sample of Greek
internet users. The questionnaire of the study was extensively tested for its construct
validity. In order to test the proposed conceptual framework, the “structural equation
modelling” technique was used. Such an analysis provides the highest level of statistical
verification.
JSIT
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