Internet Banking Adoption in Developing Countries: A Meta-Analysis of the findings so

far

Introduction
With the rapid penetration of internet in the developing countries, a plethora of services are
delivered through this medium. According to James (2009), the digital divide or the
differences in penetration rate of the internet in developing versus the developed countries
have fallen in the first half of the last decade and hence more and more self-service
technologies are delivered through the internet. The availability of banking services is a case
in point. According to Bhattacharjee (2001), Internet banking is a banking channel that
allows consumers to perform a wide range of financial and non-financial services through a
bank's website. Over the years, numerous studies have looked at the phenomenon of
adoption of internet banking services by customers. These studies have looked at a host of
variables and issues. Most of these studies have however been carried out in the developed
countries. A meta-analysis carried out by Hoehle, Scornavacca and Huff (2012) on electronic
banking channels, indentified 247 different studies, predominantly among customers in
developed countries. Here we attempt to look at empirical studies which focus on customer
adoption and related variables in developing countries. In the next sections we explain our
methodology as well as the results of our analysis.
Internet Banking Adoption in Developing Countries
Internet banking has picked up in the developing countries very recently. According to a Mc
Kinsy study published in 2011, roughly 18% of all people who patronise banks in China, now
use internet banking channels while in India 7% of banking customers use the Internet (Lam
and Pant, 2011). However, these figures are quite poor compared to the situation in
developed countries where the online banking penetration is between 30 and 50%. (Comscore
datamine, 2012). Consequently, research studies which consider internet banking adoption in
developing countries is relatively scarce and the extant knowledge in this domain is limited.
The process of internet banking adoption in developed countries has almost reached the
saturation phase. Almost all the banks rely heavily on the internet to offer services and almost
all the customers who are interested to use internet banking channels have adopted them. The
problems faced by internet banking channels in developing countries like lack of trust, lack of
knowledge about services, etc. are therefore not prevalent in the developed world. As far as
the developing countries are concerned, the level of adoption of IB services has hardly
crossed the early adopter segment and hence basic problems remain. This is well
acknowledged by the study conducted by Malhotra and Singh (2010) among banks in Inida.
The study showed that even in 2008, a large number of Indian banks just provide basic
internet services. Research in this area is therefore still very nascent. However, in the recent
past, several studies have attempted to understand the dynamics of the adoption of internet in
developing countries. In the present study, we conduct a basic meta-analysis of these studies.
The main aim is to bring together the evolving literature in this field and compare the
different theoretical approaches followed in these set of studies as well as the main factor
considered. The meta-analysis also attempts to provide directions for future research in this
area.

Methodology
To generate the set of studies that presently constitute the crux of the literature in this field,
the main electronic databases like EBSCO, Proquest and Google scholar were searched using
key phrases like internet banking adoption in developing countries, internet banking
adoption in emerging economies, internet banking adoption etc. The same procedure was
followed by previous studies which adopted a meta-analytic procedure (eg. Hoehle,
Scornavacca and Huff, 2012). In order to reduce the likelihood of missing out crucial studies,
a rigorous cross-referencing exercise was carried out from the initial set of studies that
emerged from searching the database. These procedures resulted in a list of about 20 different
studies. During the initial stage of the process we deliberately eliminated studies which did
not include internet banking adoption or an associated variable (like use of internet banking
channels, attitude to use internet banking etc.) as the dependent variable. Hence studies which
looked at interent banking satisfaction, trust etc. were not included in the initial set.
Further we used the per-capita national income as the main criterion to decide between
developing and developed countries. Using this criteria we did not include countries with a
per-capita national income of more than $10,000 in the list. Hence we eliminated studies
from countries like Taiwan and Hong Kong. Finally we also eliminated studies that did not
follow a causal design in the analysis. A few studies were descriptive in nature and looked at
the main characteristics of internet adopters rather than exploring causal relationships
between the independent and dependent variable. After the elimination process we located 12
studies which consider this domain. The list of studies is shown in Appendix-1. Of the
twelve studies considered two are from Turkey, two from Saudi Arabia, and one each from
India, Vietnam, Tunisia, China, UAE, Thailand, Brazil and Estonia.
Theoretical Approaches Followed
The three predominant theories used to understand adoption of Internet Banking are (1)
Technology Acceptance Model (TAM) developed by Davis (1989) (2) Diffusion of
Innovations Theory developed by Rogers (1995) and Theory of Reasoned Action developed
by Fishbein and Ajzen (1975). Almost all the studies listed in this meta-analysis follow one
of these approaches or a combination of these approaches. Three of the 12 studies considered
(Mansumitrchai and Chiu, 2012; Eriksson, Kerem and Nilsson, 2008 and Hernandez and
Mazzon, 2007) follow a combination of DOI and TAM frameworks while eight other studies
follow a combination of TRA and TAM. While one of the studies (Zhao et al, 2010) follows
an entirely different framework.
Most Important Independent Variables
Since the studies considered here followed a combination of popular theoretical frameworks,
the independent variables were also derived from these theoretical frameworks. Table.1 gives
the frequency of the independent variables appearing in these studies.
Independent variable
Perceived Usefulness
Perceived Ease-of-use
Trust in the bank
Perceived Risk/security
Subjective Norm
Governmental Support
Relative Advantage
Self Efficacy
Technology Support

Frequency of Appearance
7
7
7
4
3
3
2
2
2

Website-quality/design
Internet Experience
Compatibility
Difficulty/lack of complexity
Need for Human Contact
Manageability
Resistance to Change
Social Influence
Awareness of Services
Result Demonstrability
Trial ability
Income

1
1
2
2
2
1
1
1
1
1
1
1

Compared to the Hoehle, Scornavacca and Huff (2012) [HSH] study, which has a sample
highly dominated by studies from developed countries, the meta analysis of studies from
developing countries show some similarities as well as differences. While the HSH study
show Ease of Use and Usefulness as the most important independent variables in explaining
electronic banking adoption accounting for 97 and 58 out of 247 studies several important
independent variables featured in developed country studies are not given much importance
in studies conducted in developing countries. For instance costs associated with use, habit,
loyalty to the bank, etc. have not featured very highly in developing country studies.
Similarly since a large portion of the studies in developed countries followed a DOI
framework (35 out of 130), the DOI related independent variables like relative advantage,
trialiability, complexity etc. have been considered more in the context of developed country
studies rather than in developing countries.
Interestingly, compared to studies in developed countries, developing country studies feature
variables like governmental support, technology support etc. Another interesting contrast
is the variable trust, which features prominently in developing country studies (7/12 studies)
is not such a major factor in developed country studies (31/247 studies).
Conclusion and Discussion
As customers in developing countries are slowly adopting internet banking, several important
dimensions of the evolving phenomena remain under researched. The systematic review of
extant literature in this field is aimed at encapsulating what is already known and also to
provide new ideas for future studies. For instance very few studies have looked at social and
cultural issues in the developing countries that impact the adoption of internet banking
services. Many of the existing studies rely on student samples or otherwise a very restrictive
profile of respondents, there is scope to broaden this sample profile by looking at low income
consumers.

Appendix-1 List of studies considered

Study
Country Methodology Independent Variables
Nasri, Charfeddine
(2012)

Tunisia

Mansumitrchai and
Chiu (2012)

United
Arab
Emirates

Kesharwani and
Bhist (2012)

India

Chong et al (2010)

Vietnam

Zhao et al (2010)

China

Alsajjan and
Dennis (2010)

Saudi
Arabia

Al-Solami, Golami
and Clegg (2009)

Saudi
Arabia

A survey
among 202
bank
customers

Ozdemir and Trott

(2009)

Turkey

155 users of
Internet
Banking
services
Survey
among 618
users of
Internet
Banking
services
Survey
among 161
customers

Prompattanapakdee Thailand
(2009)

Celik (2008)

Turkey

survey
among 284
bank users of
Internet
Banking
services
Survey
among 330
onlinebanking users
A survey
among 619
university
students
Survey
among 103
internet bank
users
Survey
among 504
College
students
Survey
among 386
students

Ease-of-use, usefulness,
subjective norm, selfefficacy, governmental
support, technology
support

Dependent
Variables
Intention to use
internet banking

Compatibility,
Difficulty, Security,
Trust, Third Party
Concern, Status, Human
Contact
Trust, behavioural
control, web-site design,
social influence, risk,
usefulness, ease-of use
Ease of use, trust,
usefulness,
governmental support

Internet Banking
Adoption

Behavioural
intention

Perceived risk, trust in

Bank, IBS Competence

Intention to use
Internet Banking

Perceived Usefulness,
Trust, Perceived
Manageability,
Subjective Norms
Resistance to Change,
trust, self-efficacy,
social influence,
awareness of services,
usefulness, ease-of-use,
quality of Internet
connection
Perceived Ease of Use,
Perceived Usefulness,
Internet Experience,
Income
Internet Banking
Experience, Trust,
Personal Relationships
Perceived Ease of Use

Attitudinal
Intentions

Ease of Use, usefulness

Behavioural control

Attitude towards
use, intention to
use internet

Intention to use
internet banking

Attitude to use,
intention to use,
actual use

Internet Banking
Adoption.

Intention, Actual
Use

Eriksson, Kerem
and Nilsson (2008)

Estonia

Hernandez and
Mazzon (2007)

Brazil

Survey
among 1810
banking
customers
Survey
among 600
users and
non-users of
Internet
Banking

Relative advantage, lack

of complexity,
Perceived risk,
Compatibility
Relative Advantage,
Visibility, Result
Demonstrability, Ease
of Use, Trialability,
Subjective Norm, SelfEfficacy, Technology
Support, Government
support

banking
Use of internet
bank

Intention to Use,
Actual Use of
Internet Banking

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