8/10/2019 Paper - Analysis of Critical Factors Influencing
Adoption of E-banking
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ANALYSIS OF CRITICAL FACTORSINFLUENCING ADOPTION OF
e-BANKING
Ramakrishnan N*1
, Subhrajit Dey*2
1Associate Professor, Institute of Management, Christ
University, Bangalore1e-mail:
[email protected]
2Scholar, Institute of Management, Christ University,
Bangalore2e-mail: [email protected]
Abstract - The need for deployment ofInformation technology in
various sectors hasbeen a growing phenomenon. The bankingindustry
witnessed a paradigm shift fromtraditional paper-based mode of
operation to
paperless transactions and online updates, thusfuelling the
growth of e-banking. This paperfocuses on analysis of critical
factors fore-banking based on research studies.
Keywords: I nf orm ation technology, paperl esstransactions,
e-banking, Cri ti cal f actors.
I INTRODUCTION
The banking sector plays an activerole in the emerging economy
of India. There
has been a perception of formal and rigidapproaches being
followed in bankinginstitutions.[1]
Banking institutions could provideleadership in this era of
economictransformation. This has been facilitated bydeployment of
information technology in theshift towards paperless banking or
e-banking,
Electronic banking or e-bankingcreated a revolution in the
banking servicessector. e-banking refers to those types ofservices
using which customers of a bankcould avail and carry out most of
the bankingservices through computers, ATMs(Automated Teller
Machines) or mobile
phones. Electronic Funds Transfer (EFT) playsan important role
in the e-banking approach,and is utilized by a large segment of
bankcustomers. Electronic funds transfer helps tominimize usage of
cheques and paper-basedtransactions by deployment of information
andcommunication technology. EFTs are initiatedthrough devices like
cards or codes that allowus or those whom we authorize to access
ouraccount. Most banking institutions use ATMor debit cards and
Personal Identification
Numbers (PINs) for this purpose. They alsouse other types of
debit cards requiringsignature or a scan of the first holder of
theaccount. For example, some use radiofrequency identification
(RFID) or other formsof contactless technology that scans
theaccount-related information without directcontact. Countries
also have the federalElectronic Fund Transfer Act (EFT Act) tocover
some electronic consumer transactions.[2].
E-banking includes various platforms, but not limited to ATMs,
Internet Banking,Telephone Banking, and Electronic DemandDraft
Creation.
II. SHIFT TO e-BANKINGWith the advent of universal banking,the
banking sector transformed to fast-paced
banking approaches and methodologies. Theircore mission shifted
towards customerretention through speedy and accurate online
banking. E-banking involved integration withtelephonic systems
and web basedtechnologies to focus on various segments ofthe
society. This enabled a paradigm shift from
profit-orientation to customer-orientation.Many traditional
banks did not have
online banking operations until a few yearsago. In the recent
past, such strategies have
become more prevalent.The shift to e-banking has been
witnessed among the nationalized banks andalso among other
entities such as cooperative
banks and smaller private banking institutions.The banks may
differ with regard to theirunderlying motivations for increasing
green
products and services (e.g. to enhance long-term growth
prospects, or sustainability
principles on which a firm is based). Thegrowth, variation and
innovation behind such
8/10/2019 Paper - Analysis of Critical Factors Influencing
Adoption of E-banking
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Fig. 3. Influence of network and other banking issues
one-banking
[4]A higher percentage of respondents
(nearly 60%) agreed that network may not bealways reliable.
About 70% agreed that thereare occasions when the ATM will
makedeductions from their account without anywithdrawal of cash,
while only 40% agreedthat they have had an experience offraudulent
acts with scammers during mobilemoney transfer. On e-banking, only
4 5 % ofthe respondents agreed that the Nigeria
banking system is stable enough for e-bankingand about 77%
agreed that insecurity in thefinancial institutions in Nigeria may
jeopardizee-banking in Nigeria. [4]
Study on E-Banking: Indian ScenarioA research was conducted in a
leading
Nationalised bank in India with the aim offinding the Acceptance
and Satisfaction ofe-Banking Services among the bankscustomers. The
exploratory research wasconducted to find whether the customers of
the
bank have accepted e-banking services, andalso whether they were
satisfied or not.
Both primary and secondary sourcesof data were used for the
research. Thesecondary data was derived from the issuesand
complaints of customers which includedthe e-banking measures like,
ATMs, Internet
banking, Mobile banking. Primary data wasderived through usage
of structuredquestionnaires.
The findings of the research aredepicted in the following
chart:
Fig. 4. Internet penetration in customers of the bank
The study with reference to a customersample in a particular
bank revealed that 64%of customers were Internet users.
The preference of banking services as perceived by customers is
depicted in thefollowing chart.
Fig. 5. Preference of Services
As indicated, only 23% of thecustomers preferred Internet
banking services.The key parameters which influenced adoptionof
e-banking services as indicated by therespondents were Convenience
of access to thee-banking service, Security, and
User-friendliness.
Fig. 6. Convenience of access as an influencing factor in
theadoption of e-banking
64%
36%
Internet penetration in customersof the bank
users of internet
non-users of internet
ATM69%
INTERNET
BANKING23%
MOBILEBANKING
0%
OTHERS8%
PREFERENCE OF SERVICES
27.30%
81.80%
18.20%
Convenience
Important Indifferent
Not Important
