Customer Attitudes to Online Banking - Essay Example

Customer attitudes to online banking University Student Id Course Literature review Online banking Online banking entails making use of electronic payment systems in transactions. The banks that provide online banking services ensure that the customers can be in a position to make use of ATMs at retail stores and other business. The utilization of the electronic banking services substantially is determined by the attitude of the clients where the clients are much concerned about the security issues when using Internet banking services. The online banks provide customer services through emails and phone where the availability of 4G networks and Wi-Fi have been a boost to the online banking services (Sarel and Marmorstein, 2003). The advancements that have been taking place in technology have contributed a lot to the automation of banking services. Banking services that can include transferring money and paying bills are provided online where many banks are working towards ensuring convenience. Online banking entails the provision of retail banking products of small value as well as services via the electronic channels. Some of these products and services include; the deposit taking, account management and also the electronic bill payment. However, in accordance to Pikkarainen, et al. (2004), the term internet banking was defined as the aspect of automated delivery of both new and also traditional banking services as well as products to the clients via electronic or even interactive channels of communication. Besides, the internet banking usually comprises of the various systems which facilitate the financial customers to access accounts. Also, these systems enable individuals to obtain necessary information related to the financial products and also services via the internet. In the process of ensuring that there is security in the online banking transactions, the management of the financial institutions is making sure that there is close monitoring of the banking accounts. The close monitoring of the bank accounts is done with the aim of making sure that the funds of the clients are kept safe. The attitude of the customers has been affected by the issues that are associated with the fraudulent activities in the online banking services (Shih and Fang, 2006). The advancements in technology have contributed a lot towards the process of improving security in online banking. However, the clients using Internet banking services have continued to be vulnerable to insecurity issues related to hacking. As a result, banking institutions that have been offering online banking services ensure that unauthorized access is prevented by providing the necessary advice to the customers. Most clients mostly access the electronic banking services by making use of the intelligent devices which are electronic such as the Automated Teller Machine and also personal computers. Even though the aspect of internet banking may seem to behave as if it is new during its introduction, the electronic banking is portrayed as the newest and also most convenient. Additionally, via the electronic banking customers can accomplish their banking tasks in an easy way and also faster (Durkin, 2004). Furthermore, various organizations still proceed on substantially investing in the Information Technology since they hope that, by making use of this technology their business productivity would improve. However, for the aspect of information technology to increase the productivity, it has to be admitted by the intended users. Besides, it was noted that the research which was conducted pertaining the understanding of the user acceptance of the usage of the new technology has eventually resulted in various theoretical models. However, these theoretical models have been deep rooted in some aspects such as the sociology, information systems as well as the psychology (Jahangir and Begum, 2008). Importantly, the model for the technology acceptance is usually among the most used models which facilitate the studying of the internet banking acceptance. Furthermore, the Technology Acceptance Model comprises of two basic predictors of the potential adopter which are perceived as the significant determinants for the customers` attitude towards the new technology. Perceived usefulness is used to represent the extent that clients believe making use of an individual system, would improve their performance. Therefore, these two beliefs usually create a behavioral intention which is favorable towards the usage of the information technology. Consumers’ Attitudes The attitude is one of the significant factors which have an influence on the buying behavior of the customers, thus attracting much attention from the researchers. Therefore, the term attitude concerning Internet banking refers to the overall effectiveness of an individual on the usage of the internet in the banking activities. Also, there is an argument which argues that the attitude towards the customers` behavior in most cases comprises of the beliefs which control the behavior of customers. Furthermore, in the year 2003, Suh and Han defined the term attitude as the both positive and the negative feelings of an individual towards performing the target behavior. However, the attitude theory emphasizes that the more favorable attitude an individual has about a certain product or even a service, the more possibility of that individual to use the products. Also, the aspect of attitude is said to improve over time via a learning process which is usually influenced by the personality and experience. In addition, according to the research which is conducted by Casaló, Flavián, and Guinalíu (2008), concerning the consumer attitude about the electronic banking have shown that there are various factors which determine the attitude of the customers towards the online banking. Some of these factors include the aspect of the motivation of an individual and also demographic factor towards the banking technologies. Besides, different perspectives of the attitudinal belief concerning innovation can be measured by employing five perceived attributes. The perceived attributes include the compatibility, complexity and the relative advantage of innovation. Furthermore, these various attributes were initially proposed in agreement with the innovations theory. More importantly, the significance of the internet to the banking needs of the customers usually relate to the merits that accrue to the users of the technology. Therefore, relative advantages are thus significant factors which determine the adoption of the innovations by the customers. The perception of the relative advantage concerning the innovation is always positively related to the adoption rate (Shih and Fang, 2004). However, since the internet banking services create a room for the clients to access their banking accounts at any place and also at any time, it provides customers with an advantage of managing their finances in a convenient manner. Moreover, the aspect of compatibility is another significant dimension, whereby it is believed that innovation can be adopted mostly the moment it is considered compatible with the tasks of an individual. Besides, internet banking has been termed as the delivery channel which is compatible with the present day banking customer. On the other hand, the term complexity is the extent that is perceived to be challenging for the customers; thus negatively impacting the adoption of the internet. Also, complexity is viewed as the opposite of the aspect of the ease of use, which has been noticed to have a direct influence on the adoption of the internet. Moreover, concerning the importance of the trial-ability, it was stated that the capable adopters of the new technology who are permitted to experiment it are more likely to adopt it (Sarel and Marmorstein, 2003). However, if the clients are given the opportunity to try the innovation, the fear would be minimized hence providing a situation which is predictable. Perceived security Security has been of great concern in the process determining the attitude of the customers towards online banking. There are many cases of insecurity in the use of online banking that has been witnessed in the banking industry. Ascertaining the customers the security of funds in the process of making use of online banking. Considering the fact that online transactions have increased, the demand for electronic banking has expanded. However, many customers have feared to use online banking as they fear to lose their money (Shih and Fang, 2006). Security concern among the customers has been the main factor that has been hindering online banking. Despite the fact that electronic banking has become a necessity, many customers have been reluctant to use online banking, as they do not trust the security systems used in online banking. Security is crucial in developing a positive attitude towards the use of online banking. There have been many cases of people who have lost money in the process of transacting online. Security in online banking is used to imply the threats that result in the creation of a condition that can lead to loss of money. The customers can face a threat through fraud, abuse, modification of data and denial of service. The security threats in online banking occur at the server level and during communication where the personal information can be disclosed to the wrong person (Durkin, 2004). Most of the threats that have been witnessed in online banking have been through data transaction and transmission. Besides, false authentication has been common where an unauthorized person gains access to the account of the client. The relationship which exists between the client attitude and the aspect of security usually brings about the notion concerning the perceived consequences. Also, the aspect of the internet security generally provides favorable expectations whereby the usage of the internet becomes reliable and predictable hence there are no harmful effects can occur when an online consumer makes use of the internet. In addition, there are two types of beliefs which were identified as the primary determining factors for the information system acceptance. These beliefs can include the ease of using and usefulness associated with the online services (Sarel and Marmorstein, 2003). However, the ease of use always has a positive influence on the attitude since it promotes an impression which is favorable concerning the adoption of the service. According to the research which was conducted by Jahangir and Begum in the year 2008, the aspect of security when using online banking is critical in ensuring a positive attitude among the clients. Besides, the study provided evidence that the role of trust as an effect of the perceived ease of use. Furthermore, it was demonstrated that the aspect of the perceived ease of use improves security since it increases the perception which the electronic vendors are always investing in the relationship with their clients. Some of the aspects which are associated with the various changes in the online trust include navigation, broken links, and also the transaction interaction. However, many researchers have given out a warning that failure to have the aspect of security may be the major crucial long-term barrier in the realization of the full capability as well as attitude concerning the adoption of the internet banking. The lack of security in online banking is usually a critical issue which requires being addressed concerning the adoption of the internet banking (Lassar, Manolis, and Lassar, 2005). It has been observed that lack of security has been a major reason as to why the majority of the customers are not adopting to the online services which involve financial exchanges. In addition, the researchers have also argued that the online customers have kept away from the vendors who have no trust on them. Therefore, the orientation of the customers concerning the perception of the electronic system of communication is quite significant in the determination of their behavior and also trust. The degree to which customers have trust in the electronic system is more likely to relate to their general perception concerning the online banking security. Moreover, during the assessment of the trust factor by the customers themselves, several issues usually come up in their mind. One of the major matters that are likely to arise in their minds is about the expected competency concerning the electronic system (Shih and Fang, 2004). At this situation, the customers make use of the various performance measures which include; the navigability and also reliability in their process of evaluating the electronic transactions. However, when the customers are transferring their personal financial data via the electronic network, there are usually various risks which the unauthorized parties would interfere with this information. Internet Banking Adoption The adoption of the electronic banking among the customers is significantly affected by the attitude they have developed after evaluating the guarantee of security. Developing a positive attitude towards electronic banking is crucial in making sure that the clients are willing to make use of online banking services during business transactions. Considering the Technology Acceptance Model, the prospective overall attitude of a consumer concerning a given system which is based on technology represents significant determinant as to whether the customers will make use of the system. Moreover, in the year 2006, a study was presented by Floh and Treiblmaier that showed how the consumers were adopting to the direct banking services by making use of the model of the innovation attributes as well as the personal features of the both adopters and the non-adopters. Research has shown that the most significant perceived positive attribute concerning the internet banking was its availability by operating 24-hours. The negative attributes of the internet banking include the complexity and also the risk of service. These attributes were the significant disadvantages which were associated with the aspect of the internet banking. In general, the same study revealed out that the adopters of the new technology received higher incomes as compared to the non-adopters and also they worked for a long time. In the year 2004, an analysis was conducted by Durkin to determine the adoption of electronic banking showed that the personnel offering online banking services is considered responsible for ensuring improvements. Moreover, the major factors which have an impact on the adoption of the internet banking include its compatibility with customers and also the ease of use. However, attitudes concerning the new technologies may also be connected to the set of personal features. For example, the young customers usually value the time saving of the online banking as compared to the older customers. In addition, the new technology acceptance has shown that customer can be satisfied the moment certain requirements are met. The attitudes concerning the electronic banking were also impacted by various factors which include; the reference groups and also the dissatisfaction with the current banking services. One of the reasons as to why the consumers shifted from using the traditional delivery channel to the electronic self-service was because of the dissatisfaction factor. Some of these dissatisfaction factors include; the slow speed when delivering a service and inconvenience among the others (Shih and Fang, 2006). However, the current studies conducted by Lassar, Manolis and Lassar, (2005), concerning the client satisfaction with the bank services have indicated that the early users and the utilizers of the online banking are more likely to be satisfied as compared to the other customers. Also, the technology service delivery has become common among clients as customers are looking for services that are convenient and efficient. However, some factors such as the motivation of the consumers towards the use of new technologies are playing an important role in determining the adoption of online banking services. References Casaló, L.V., Flavián, C. and Guinalíu, M., 2008. 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Effect of trust on customer acceptance of Internet banking. Electronic Commerce research and applications, 1(3), pp.247-263. Read More