Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Banking on benefits

27.04.2010
People make the decision to use internet banking either because they recognize the benefits or because of peer pressure but rarely because of perceived prestige or celebrity endorsement, a study published in the International Journal of Banking, Accounting and Finance. The research hints at how banks could improve the spread of internet banking simply by improving the services offered.

From a bank's perspective there are many advantages to persuading their customers to adopt internet banking – clicks, as opposed to bricks, and mortar banking, as it were.

Primarily, there is the reduction in staffing, which can reduce overall costs, even if information technology and online security systems must be put in place and the reduction in buildings infrastructure required to service customers. There is also the potential for increased revenue through increased transactions and customer activity facilitated by the ease with which they can carry out different tasks online without having to visit a bank's premises.

Internet banking is being adopted by customers as a viable alternative to managing their money with approximately 55 million US households routinely using online banking. Some banks are already internet only and offer preferential interest rates and terms to their customers. However, there are many people yet to adopt online banking, which represents a significant challenge to banks that would like to see increase their virtual customer base.

Understanding what makes people adopt a particular technology could be crucial to the future success of internet banking, say Weihua Shi and Kenneth Zantow of the College of Business, at the University of Southern Mississippi, Long Beach.

They point out that while there are various research models that have attempted to explain the adoption of new technologies, the majority of these assume that people make a rational choice based on a systematic decision process. In many cases this may be entirely contrary to how people behave and they suggest that it is more likely that people simply follow the herd. If large numbers of people are already using a particular technology, then once a tipping point is passed, peer pressure causes other people to adopt the innovation too.

Imitation, they say, is the best form of flattery, and yet there are very few published research studies that discuss how irrational imitation can influence technology adoption. Shi and Zantow hope to remedy this situation and have looked at three types of imitation: frequency-based, trait-based, and outcome-based that influence adoption. Frequency-based imitation simply implies that people will follow the herd, individuals are more likely to imitate an action if that action has been taken by a large number of other individuals. Trait-based imitation is usually associated with individuals taking a particular action because other specific people whom they hold in high regard have previously taken that action. Outcome-based imitation is a more sophisticated approach to decision making in which individuals assess the impact adoption of the technology has on other people.

The team questioned individuals on their attitudes and their adoption of internet banking and adjust their results to control for gender, age, and income.

Specifically, for frequency-based imitations, respondents were asked to indicate the degree to which they agree that using internet banking was popular, particularly in their peer group. For trait-based imitations, respondents were asked about whether people of high status use internet banking and whether that in itself is a status symbol. For outcome-based imitation, the team asked whether people using internet banking were more efficient and profitable in their banking. A sliding scale of agree-to-disagree was used and the team could then analyze the data statistically.

The results showed that frequency-based and outcome-based decisions were the strongest predictors of whether someone would adopt internet banking. "The results indicate that awareness of the positive outcomes associated with internet banking, or that a large number of customers had made the decision to use internet banking, would influence potential customers to jump on to the bandwagon," the team says.

Moreover, banks could boost adoption if they improve the online banking service as outcome-based decisions were predominant rather than people simply following the herd. Trait-based imitation was not a significant factor. While other products are often associated with celebrities or other successful people through their advertising efforts, the participants in our study indicate this may not be helpful for promoting internet banking," the team says.

"Why use internet banking? An irrational imitation Model," in International Journal of Banking, Accounting and Finance, 2010, 2, 156-175

Weihua Shi | EurekAlert!
Further information:
http://www.usm.edu

More articles from Business and Finance:

nachricht Mathematical confirmation: Rewiring financial networks reduces systemic risk
22.06.2017 | International Institute for Applied Systems Analysis (IIASA)

nachricht Frugal Innovations: when less is more
19.04.2017 | Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO

All articles from Business and Finance >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: A “cosmic snake” reveals the structure of remote galaxies

The formation of stars in distant galaxies is still largely unexplored. For the first time, astron-omers at the University of Geneva have now been able to closely observe a star system six billion light-years away. In doing so, they are confirming earlier simulations made by the University of Zurich. One special effect is made possible by the multiple reflections of images that run through the cosmos like a snake.

Today, astronomers have a pretty accurate idea of how stars were formed in the recent cosmic past. But do these laws also apply to older galaxies? For around a...

Im Focus: Visual intelligence is not the same as IQ

Just because someone is smart and well-motivated doesn't mean he or she can learn the visual skills needed to excel at tasks like matching fingerprints, interpreting medical X-rays, keeping track of aircraft on radar displays or forensic face matching.

That is the implication of a new study which shows for the first time that there is a broad range of differences in people's visual ability and that these...

Im Focus: Novel Nano-CT device creates high-resolution 3D-X-rays of tiny velvet worm legs

Computer Tomography (CT) is a standard procedure in hospitals, but so far, the technology has not been suitable for imaging extremely small objects. In PNAS, a team from the Technical University of Munich (TUM) describes a Nano-CT device that creates three-dimensional x-ray images at resolutions up to 100 nanometers. The first test application: Together with colleagues from the University of Kassel and Helmholtz-Zentrum Geesthacht the researchers analyzed the locomotory system of a velvet worm.

During a CT analysis, the object under investigation is x-rayed and a detector measures the respective amount of radiation absorbed from various angles....

Im Focus: Researchers Develop Data Bus for Quantum Computer

The quantum world is fragile; error correction codes are needed to protect the information stored in a quantum object from the deteriorating effects of noise. Quantum physicists in Innsbruck have developed a protocol to pass quantum information between differently encoded building blocks of a future quantum computer, such as processors and memories. Scientists may use this protocol in the future to build a data bus for quantum computers. The researchers have published their work in the journal Nature Communications.

Future quantum computers will be able to solve problems where conventional computers fail today. We are still far away from any large-scale implementation,...

Im Focus: Wrinkles give heat a jolt in pillared graphene

Rice University researchers test 3-D carbon nanostructures' thermal transport abilities

Pillared graphene would transfer heat better if the theoretical material had a few asymmetric junctions that caused wrinkles, according to Rice University...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Ecology Across Borders: International conference brings together 1,500 ecologists

15.11.2017 | Event News

Road into laboratory: Users discuss biaxial fatigue-testing for car and truck wheel

15.11.2017 | Event News

#Berlin5GWeek: The right network for Industry 4.0

30.10.2017 | Event News

 
Latest News

NASA detects solar flare pulses at Sun and Earth

17.11.2017 | Physics and Astronomy

NIST scientists discover how to switch liver cancer cell growth from 2-D to 3-D structures

17.11.2017 | Health and Medicine

The importance of biodiversity in forests could increase due to climate change

17.11.2017 | Studies and Analyses

VideoLinks
B2B-VideoLinks
More VideoLinks >>>