Internet banking was first proposed in the early 1990s. Since that time it has been developing rapidly together with the increased use of Internet. However, its effect on the use of banking accounts is still an underexplored question.
The majority of studies can be divided into three groups. The first group investigates the necessary conditions for bank customers to start using Internet banking. Based on surveys, Al-Rfou (2013) reveals that customers tend not to use the service even if they have it provided. Complexity of usage, low privacy and bad quality of Internet connection are the suggested reasons for Jordan.
This evidence is confirmed by Ali Bayrakdaroğlu (2012), who adds awareness as an important factor. The results were obtained from questionnaires distributed among different bank users. The author states that evaluation of factors of e-banking usage varies according to demographic characteristics of customers as well. Koskosas (2008), Liao and Wong (2007) claim the importance of trust and stringent security control for efficient Internet banking. In that way, the level of trust to an institution may be the reason to take e-banking. The second group of studies measures the aggregate effect of e-banking on the bank performance. …show more content…
According to Drigă et al. (2009), Internet banking can bring sustainable competitive advantage in terms of market share, but not in making profits. The results are based on the World Retail Banking Report 2009 (for 8 European countries, the US and Japan). It reveals that an active Internet Banking user on average paid for transactions 34% less than an active branch user.
However, these findings were caused by European banks ' aggressive policy aiming to discourage customers from visiting branches. The amounts of savings, time with bank or number of transactions were not investigated.
Bouckaert and Degryse (1995) argue about two opposite effects of remote banking services on interest rates. Firstly, they promote depositors to add more saving accounts or keep more funds on existing ones, which facilitates attraction additional deposits at current interest rates. Secondly, providing remote services can decrease customer 's transaction costs for other banks that offer similar services, facilitating competition and causing increase in interest rates. The impact of e-banking on a bank size in the US is evaluated in Sullivan and Wang (2005). They claim that Internet makes it easier to serve and communicate with clients. Moreover, it saves costs for banks on conducting low-value-added transactions. Largest banks face higher demand for their services, thus, are more likely to figure out a cost saving opportunity, adopt Internet banking first, and enjoy further increase in size. In long run, when innovation reaches smaller banks, the banking industry converges to new post-innovation steady state distribution. Isaeva (2012) and Nath et al. (2001) as well argue that Internet banking expands the …show more content…
Maroofi and Nazaripour (2012), Raza et al. (2013) concentrate on how quality of online services influences customer 's satisfaction. Looking at individual response and controlling for such factors as trust and reputation results into positive, but not significant effect of e-banking quality. Floh and Treiblmaier (2006) take into account a role of consumer characteristics such as age, gender or technophobia and conclude that the loyalty of e-banking customers is affected by trust, Web site quality and services quality. The described results are based on data from surveys where customers of the one Australian online bank were questioned. Respondents were not compared to non e-banking
The majority of studies can be divided into three groups. The first group investigates the necessary conditions for bank customers to start using Internet banking. Based on surveys, Al-Rfou (2013) reveals that customers tend not to use the service even if they have it provided. Complexity of usage, low privacy and bad quality of Internet connection are the suggested reasons for Jordan.
This evidence is confirmed by Ali Bayrakdaroğlu (2012), who adds awareness as an important factor. The results were obtained from questionnaires distributed among different bank users. The author states that evaluation of factors of e-banking usage varies according to demographic characteristics of customers as well. Koskosas (2008), Liao and Wong (2007) claim the importance of trust and stringent security control for efficient Internet banking. In that way, the level of trust to an institution may be the reason to take e-banking. The second group of studies measures the aggregate effect of e-banking on the bank performance. …show more content…
According to Drigă et al. (2009), Internet banking can bring sustainable competitive advantage in terms of market share, but not in making profits. The results are based on the World Retail Banking Report 2009 (for 8 European countries, the US and Japan). It reveals that an active Internet Banking user on average paid for transactions 34% less than an active branch user.
However, these findings were caused by European banks ' aggressive policy aiming to discourage customers from visiting branches. The amounts of savings, time with bank or number of transactions were not investigated.
Bouckaert and Degryse (1995) argue about two opposite effects of remote banking services on interest rates. Firstly, they promote depositors to add more saving accounts or keep more funds on existing ones, which facilitates attraction additional deposits at current interest rates. Secondly, providing remote services can decrease customer 's transaction costs for other banks that offer similar services, facilitating competition and causing increase in interest rates. The impact of e-banking on a bank size in the US is evaluated in Sullivan and Wang (2005). They claim that Internet makes it easier to serve and communicate with clients. Moreover, it saves costs for banks on conducting low-value-added transactions. Largest banks face higher demand for their services, thus, are more likely to figure out a cost saving opportunity, adopt Internet banking first, and enjoy further increase in size. In long run, when innovation reaches smaller banks, the banking industry converges to new post-innovation steady state distribution. Isaeva (2012) and Nath et al. (2001) as well argue that Internet banking expands the …show more content…
Maroofi and Nazaripour (2012), Raza et al. (2013) concentrate on how quality of online services influences customer 's satisfaction. Looking at individual response and controlling for such factors as trust and reputation results into positive, but not significant effect of e-banking quality. Floh and Treiblmaier (2006) take into account a role of consumer characteristics such as age, gender or technophobia and conclude that the loyalty of e-banking customers is affected by trust, Web site quality and services quality. The described results are based on data from surveys where customers of the one Australian online bank were questioned. Respondents were not compared to non e-banking