Illinois State University

Consumers' Acceptance of Online Banking

Online banking also called Internet banking can be defined as performing financial transactions over the Internet through a bank�s website. Online banking provides many advantages to consumers. Consumers can access data any time, anywhere irrespective of location and hours of operation of the bank. Customers are not the only beneficiary of this new service. Making use of online banking, commercial banks may greatly increase the market coverage and better track customers. Though it sounds like a win-win situation for both the parties still online banking is not that prevalent, in spite of the wide spread of personal computers and internet service.

The objective of this paper is to find out what are the factors affecting adoption of internet banking among consumers. We would find out why some people start using this facility while others do not. What are the concerns of people who do not use it? We would also delve into traits of adopters of internet banking.

A questionnaire will be utilized to survey approximately 400 people. We would like to have a representative sample from people of different race, age, gender, occupation, income group etc. Although Internet banking service is being offered to personal and business clients, in our research study, data will be collected from personal respondents only. Our research would have a significant contribution for the banks in streamlining their online banking customers. It would throw some light on the types of customers who bank online. So banks can focus their online marketing strategies on those customers.