Impact of Internet Safety in Adoption of E-Banking Services

Atanu Adhikari: Doctoral Research Fellow Prof. of Marketing Research,IIMT. India


Adoption of an innovation like technology enabled services and the factors underlying the adoption process have been an important topic of study in marketing research. Several researchers addressed this issue not only from theoretical and behavioral perspective but also from a quantitative modeling viewpoint (Rogers 1995). This is because, since long, creating and using new technology have been the keys to marketing success. In today’s world, however, business people feel new urgency due to the increasing requirements for technological advances as well as the accelerating rate of technology diffusion. Both require strategic thinking about technology and namely internet, beyond the simple developments of new products or services. The task of managing technological safety is integral to, and often synonymous with, strategic management as consumers play a key role in success. To handle technology centric innovation and manage its implementation requires better understanding not only about technology itself but also of the evolution, maturation, and diffusion of technologies throughout the consumers and consumer’s adversity towards safety of transaction.

Effectively management of technology enabled services call for a better understanding and diffusion of technology as well as maturation and inclination of consumers. Although organization can develop technology centric product; social, economic and demographic changes are not in control of individual firm. The manager’s task is to recognize the push pull relationship between firm’s offer of technology service and consumer’s inclination towards that technology. In my previous research (Adhikari 2005) I have tried to argue that adoption of technology centric product and services in developing countries like India largely depend on technology inclination of the consumers. Technology Inclination (TI) is an inclination to hold and use new technology for fulfillment the needs of life considering security adversity. It is a measure of preference of going for a techno-centric product, service or process than availing traditional way of business. It is comparative choice towards technology when safety is an prominent issue. Hence, the way today’s consumers make buying decision and product choices also governed by their technology inclination and risk averse.

In the previous research, I have found out six dimensions that influence technology inclination of the consumers which is described in brief here. They are (1) Perceived Advantage, (2) Security Concern, (3) Discomfort, (4) Traditionalism, (5) Positivism, (6) Convenience. While Factors 1, 5 and 6 are Push Element Factor 2, 3, and 4 are Pull Element.


From the parameters found in the above analysis, we can write the likelihood function as

ln [Pi / (1-Pi)] = 0.465 + 0.748 F1 – 0.606 F2 – 0.558 F3 – 0.637 F4 + 0.819 F5 + 0.730 F6

The above model represents the log-likelihood function of the logit model.

The first dimension of technology inclination and first push factor, the perceived benefit of technology enabled service found significant for adoption of computer banking (β = 0.748, p = 0.016). This means that more and more a consumer perceive the benefit of technology enabled services, the more likely he/she will adopt for the same. This perceived benefit can be increased by communicating faster as well as round the clock service,

Security is significantly related to adoption of electronic services by the consumers. Perceived security concern discourage consumers from adopting electronic services (β = - 0.606, p = 0.023). Discomfort also shows significant negative association with adoption of electronic services by the consumers (β = - 0.558, p = 0.011). Those consumers, who perceive electronic services as a complicated process, avoid adoption of the same. Traditionalism found to have significant positive effect in adoption of computer banking (β = - 0.637, p = 0.047). This says that consumers who perceive considerable benefit in traditional way of marketing are not inclined to adopt electronic services. Hence, an comparative promotional campaign may be required to narrow this perceptual gap. Finally, both positivism and convenience are highly significant (β = 0.819, p = 0.002 and β = - 0.730, p = 0.003).

We can see from the above model that technology inclination dimensions play significant role in adoption of electronic services. Marketers are to emphasis on all the six dimensions during product development as well as promotional campaign to ensure faster adoption.


In the above model, condition of adoption is based on current perception of the consumer about the perceived advantages as well as risk hurdles. To forecast the individual adoption timing, we are to consider the dynamics of perception based on the information received per unit time. Subsequently, the posterior probability required to be calculated to update the potential adopters’ perception about electronic services.