Retail customers' adoption of internet banking in Kenya

Abstract

Advances in technology have created novel ways through which businesses deliver products and services to their customers. One such technology utilized by financial institutions is Internet banking. Since the mid-1990s, the acceptance of Internet banking services has been rapid in many parts of the world. However, consumers in countries like Kenya are yet to join the frenzy of this technology in an effective manner. The motivation of this research is to analyze Internet banking as a mainstream transaction and service delivery platform. Based on Fred Davis' Technology Acceptance Model (TAM) that has been proved via research on the subject by several authors, and which presupposes the dominant usability attributes of usefulness and ease of use, this research employs an extended TAM framework to investigate the factors that influence retail customers' adoption of Internet banking in Kenya. The exploratory study is in the context of Commercial Bank of Africa, a Kenyan-owned commercial bank currently with about thirty percent of its retail customers having Internet banking accounts. The results of this study are consistent with TAM studies that have found Perceived usefulness to be the strongest predictor of an individual's adoption of technology. Further, four out of five factors examined were found to be significantly important to the adoption of Internet banking. Customer awareness was found to be insignificant in determining its adoption. This study provides insightful understanding of Kenyan retail customers' perception about Internet banking adoption in their banking transactions. It also provides support of the extended TAM model and confirm its robustness in predicting customers' intention of adoption of Internet banking, thus contributing to the literature by formulating and validating the model to predict Internet banking adoption. Banks interested in promoting online business may find these findings helpful in guiding their efforts.