Factors Affecting Customers Adoption of Mobile Banking Services

With the rapid advances in technology and changing demographics and life-style of people, the traditional branch banking is giving way to electronic banking (e-banking) and more recently mobile banking (m-banking). However, numbers suggest that the rate of acceptance of technology is quite low. In India, as quoted by an RBI report (Report of the Technical Committee on Mobile Banking, 2014), 64 banks have commenced mobile banking operations and there are 22 million active mobile banking users, which is roughly 5% of the total bank accounts. Lack of awareness, security concerns and technical issues are considered as the major reasons behind customer resistance to mobile banking services. Hence, it is pertinent for the service providers to understand and address the needs of customers so as to optimize their mobile banking experience. The current study aims at describing the usage patterns of mobile banking customers and identifying the factors which influence their usage of m-banking. For this purpose, a descriptive study was undertaken with a sample size of 200 bank account holders belonging to public as well as private sector banks, using m-banking. A structured questionnaire was administered on these respondents belonging to Ahmedabad and Gandhinagar districts of Gujarat during the period of January to March 2015. Going by the sample demographics, a typical m-banking customer in India is a young and literate male, belonging to the middle-income strata. The usage patterns of the customers suggest that as the frequency of transactions increases, people prefer the usage of ATMs. Security issues have deterred the customers from resorting to e-banking and m-banking options. Moreover, customers using m-banking find that the advantages lie in time-effectiveness, convenience, safety, operational simplicity and ease of navigation. These help in enriching their mobile-banking experience and have the potential to increase adoption of mobile banking.