Drivers and Inhibitors of Internet Banking Adoption in India

Banks are providing e-banking services, as this would ameliorate their profits. Since internet banking in India is still in its nascent stage, it is essential for e-banking institutions to enhance acceptance and usage of internet as a banking channel by their customers. This paper has reviewed the most of seminal studies in the area of diffusion of innovation and makes an attempt to do an empirical research that looked into the factors that drives and inhibits internet banking usage in India. An exploratory factor analysis followed by a confirmatory factor analysis has been applied on 362 internet banking users. Findings resulted in seven factors – perceived benefit, hacking and fraud risk, performance risk, computer self-efficacy, technology complexity, social influence, and pricing concerns. The results suggest that acceptance and usage of internet banking services can turn into a vital concern for future research, as the drivers overcoming the inhibitors over time at an influencing rate. Moreover, this study also compares the findings with existent diffusion of innovation literature and identified several additional factors that can affect internet banking adoption in India