Determinants for Consumer Choice of “Electronic Banking Utilization”; Evidence from Customers of Public Banks in Sri Lanka.

International Journal of Research and Innovation in Social Science (IJRISS) | Volume VI, Issue I, January 2022 | ISSN 2454–6186

Determinants for Consumer Choice of “Electronic Banking Utilization”; Evidence from Customers of Public Banks in Sri Lanka.

K.S. Madhushankha and R. Senathiraja
Department of Management and Organization Studies, University of Colombo
Faculty of Management and Finance, University of Colombo

Abstract
Electronic banking facilities are no longer competitive advantages but competitive necessities for banks to compete. Even the banks provide a vast body of electronic banking facilities; customers are not utilizing those facilities to the extent bank expected. However, a limited number of empirical studies have been published on electronic banking utilization; this study seeks to find the determinants for utilization of Electronic banking facilities provided by state banks for their customers in Sri Lanka?” The study is based on a quantitative approach to identify factors affecting electronic banking utilization. Individual factors, service quality, user input factors, price factor, service product characteristics & perceived risk were identified as the determinant factors as the findings. Further, it reveals different relationships and provides findings that support, confirm or contradict previous studies.

Keywords Electronic banking, Service quality, User input factors, Individual factors, Perceived risk Sri Lanka

I.1INTRODUCTION

The banking industry is rapidly responding according to the changes in customer needs and customer preferences. Factors like increasing competition, social trends, information technology developments, and financial sector regulations are significantly contributing to this rapid response of the banking sector (Giannakoudi, 1999; Byers & Lederer,2001; Marakarkandy, Yajnik & Dasgupta,2017, Islam, Jebarajakirthy & Shankar, 2021). Based on management anticipations and reactions for change, the success of retail banks varies. Electronic banking facilities like online banking, with the support of new technology, have defeated the traditional banking delivery methods. There are more advantages of electronic banking over personal-customer banking.
Adopting information technology in core business functions of the banking sector was commenced in the late 1980s’. Subsequently, the internet and was available for commercial works by the early 1990s. In Sri Lanka, Sampath Bank became the pioneer in electronic banking by introducing ATM (Automated Teller Machine) facilities. Subsequently, in 1989 they introduced the uni-bank system where customers can freely access their bank accounts through any branch. These two events radicalized the local banking sector and the electronic transaction history. After that, in 1989, the international payment solution Master card was introduced to Sri Lankan customers, thus opening the world’s market. Finally, these three milestones together revolutionized the local banking sector and paved the path for a new electronic era.
The literature is comprised of numerous studies related to electronic banking (Alalwan, Dwivedi & Williams, 2016; Safeena, Kammani & Date 2018; Šalčiuvienė, Auruškevičienė &Ivanauskienė, 2014, Yi, Zainuddin & Bakar, 2021). This study was carried out to examine consumer decision-making on electronic banking utilization over traditional banking in Sri Lanka. The researcher has operationalized the determinant factors as service quality factors, individual factors, price factors, risk factors, service product characteristics, and user input factors affecting the consumer choice of electronic banking utilization by using the consumer decision-making framework.

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