The Importance Of Internet Banking

INTRODUCTION

Internet banking or online banking has been defined as “the service that allows consumers to perform banking transactions using a computer with an internet connection”. Pikkarainen et al. (2004) while defining Internet banking based on its utility defined it as “an Internet portal through which customers can use different kinds of services ranging from bill payment to making investments"[1].

Shih and Fang et al (2000) discussed how it is advantageous for the banks to go online, as it results in potential savings in the cost of maintaining a traditional branch network[2].. Giannakoudi (1999) states Internet banking system allows banks to expand their business geographically without investing in the establishment of new branches

Calculus based trust arise out of a rational choice of user by calculating the perceived gains and losses. Relational trust is derived from repeated interactions between trustor and trustee. Institutional trust is built by institutional factor. Institutional trust plays a vital role to persuade a potential user to initiate using the technology.{27} Banker’s reputation is predominant factor to build institutional trust among the potential users. Han et al (2002) found trust to be a primary factor that influences adoption of online banking. The customer would adopt internet banking technology only when he possess positive expectations and trust regarding the technology[28]. Sohail and Shanmugam (2003) in their research considered trust as an influential variable on adoption of online banking.[29]. Nor et al (2007) empirically proved the influence of trust together with some of the attributes of IDT on Internet banking acceptance.[30] Therefore, the following hypothesis is

Venkatesh et al(2000), defined facilitating conditions as the degree to which an individual believes that an organizational and technical infrastructure exists to support technology usage.[31] Technical infrastructure refers to computer, internet facility and information quality. Nelson et al (2005) states Information quality (IQ) denotes how good the system is in terms of its output. It is measured by information accuracy, completeness, currency and format of information presentation[32] .Foon & Fah (2011) adopted four factors from Unified theory of acceptance and use of technology (UTAUT) and examined their influence on adoption of online banking. Facilitating conditions were found to be positively correlated with behavioral intention to adopt online banking.[33] Joshua et al (2011) has studied the facilitating conditions in context to online banking and proved the users who are more proficiently to access computer and internet technology are adopting internet banking better than non proficient users.[34] Therefore, the following hypothesis is