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International Journal of Bank Marketing

ISSN: 0265-2323
Online from: 1983
Subject Area: Marketing

This journal is indexed by Scopus.

A Delphi study of the drivers and inhibitors of Internet banking

Laura Bradley (Faculty of Business and Management, University of Ulster, Londonderry, Northern Ireland)
Kate Stewart (Faculty of Business and Management, University of Ulster, Londonderry, Northern Ireland)
Laura Bradley, Kate Stewart, (2002) "A Delphi study of the drivers and inhibitors of Internet banking", International Journal of Bank Marketing, Vol. 20 Issue: 6, pp.250-260, doi: 10.1108/02652320210446715
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Although Internet banking is a growing phenomenon, the underlying factors driving and inhibiting its diffusion are not well understood. This paper presents empirical research that investigated the factors driving and inhibiting Internet banking. The main component of the research was a Delphi study of expert opinion. This paper gives a brief overview of the academic literature on the diffusion of innovation and Internet banking. The conduct and findings of the Delphi study are then reported. The paper concludes that Internet banking will become an extremely important distribution channel in the future, with the drivers overcoming the inhibitors in influencing the rate. Further to this, the paper indicates that the existing diffusion of innovation literature identifies some of the factors instrumental in the diffusion of Internet banking. However, this study identifies additional issues.

Marketing, Distribution channels, Banking, Internet, Delphi method
Research paper
© MCB UP Limited 2002
Published by MCB UP Ltd


This study takes place in the context of the changing macro‐environment of retail banking. The scale of change over the past few decades, and the impact of change, have been vast. Writing in 1990, Barra suggested that the key dynamics were sophisticated customers, increasing competition and increasing costs. More recently, two key strategic forces are at work, namely deregulation and information technology. Both are global forces which have helped to create a “hyper‐competitive landscape” (Flier et al., 2001).

Of central interest to this paper is information technology. Its impact has been widely discussed – see, for example, Chorafas, 1987; Scarbrough and Lannon, 1988; Chen, 1999; Park, 1999. The information technology revolution may be one of the most dramatic innovations to affect the industry because banking activities are easily digitised and automated (Elliot and Loebbecke, 2000; Barra, 1990; Daniel, 1998; Cervantes, 1997; Morgan Stanley Dean Witter, 2000). Integral to the dynamic of information technology is the Internet and Internet banking.

Internet banking represents an electronic and remote distribution channel for the delivery of financial services on a virtual level (Reiser, 1997; Daniel, 1999). It has presented the industry with a radical innovation and supposed means of attaining competitive advantage, through cost reduction and better satisfaction of customer needs (Mols, 1999; Daniel, 1999; Carrington et al., 1997). It is notable that early predictions that Internet banking would completely transform banking have been more tempered in recent times (Canniffe, 2000; The Sunday Times, 2000; Poulter, 2000; Cuevas, 1998; Ensor, 2000).

Traditionally, distribution within the retail banking industry has largely involved the bricks and mortar branch in association, in recent decades, with the ATM, telephone and PC‐based banking and, latterly, Internet banking, (Katsorchis, 1999; Chorafas, 1987). A European study by Flier et al. (2001) found that the pace of bank adoption of the Internet has been much faster than adoption of previous technology such as ATMs or EFTPoS. The Internet has given rise to stand‐alone Internet operations such as Smile, Egg, SFNB and Westernetbank and has witnessed a large number of traditional banks introducing electronic distribution via the Internet. Given the pace of change (remember that Internet banking first appeared in the UK in 1997), it is reasonable that understanding of the drivers and inhibitors of adoption – this paper’s focus – is far from comprehensive. The natural starting‐point is to investigate what is known in general about the diffusion of innovation.

Research within the area of diffusion of innovation tries to identify patterns and rates of adoption of innovation. This has given rise to the development of numerous models facilitating the mapping of diffusion within various industries (Rogers, 1983; Barra, 1986; Mahajan et al., 1990; Chaudhuri, 1994; Abrahamson and Rosenkopf, 1997; Gallouj, 1998). Many studies have identified the main factors that encourage diffusion of an innovation. These include achievement of competitive advantage, reducing costs, and protecting an organisation’s strategic position (Johannessen et al., 1999; Bass, 1980; Ufuah, 1998; Tidd et al., 1997). Damanpour (1991) indicated that the primary reason for adoption of an innovation is due to changes in the organisation’s internal or external environment. In addition, organisational structure and size, number of previous adopters and entry of new competition to the industry may also affect the uptake of a particular innovation (Burns and Stalker, 1961; Mansfield, 1963; Davies, 1979; Romeo, 1975; Tushman and Anderson, 1986). One of the most frequently cited academic studies within the field of diffusion of innovation was conducted by Rogers and identified that relative advantage, compatibility, complexity, trialability and observability of an innovation influence the overall decision to adopt (Rogers, 1983).

Overall, the academic literature in this area has largely focused on motivating factors. This is to the neglect of the reasons that inhibit or delay the diffusion of an innovation. In addition, the studies conducted have focused predominantly on manufacturing as opposed to services (Carman and Langeard, 1980; Gallouj, 1998; Michie, 1998; Johanessen et al., 1999). This suggests that understanding of the nature of diffusion of innovation in the services sector is less comprehensive.

Diffusion of innovation in banking

A small number of studies have, however, been undertaken within the retail banking industry of the diffusion of innovation. Jayawardhena and Foley’s (2000) survey of UK Internet banking facilities suggested that the pace of adoption, by the retail banks, of Internet banking was actually very slow. It has been speculated that the general introduction of new technologies such as mobile telephony and video conferencing may speed the adoption of Internet banking (Daniel, 1997; Dannenberg and Kellner, 1998; Furash, 1999; Young, 1999). At a fundamental level, the adoption decision is governed by supply and demand side factors – that is, consumer demand for Internet banking and the available supply of new technology, particularly where it can reduce reliance on the branch network, (Harvey and Filiatrault, 1991; McGoldrick and Greenland, 1994; Devlin, 1995; Daniel, 1999). More specific drivers of bank Internet adoption have been identified. These include protection of reputation, competition, cost savings, mass customisation, enhancement of marketing and communication activities, and retention and attraction of consumers (Daniel and Storey, 1997; Howcroft and Lavis, 1986; Sheshunoff, 2000; Tomkin and Baden‐Fuller, 1998; Roth and Van der Velde, 1989; Mols, 2000; Read, 1998). Contrary to these motivating factors, security concerns have been highlighted as the most important issue delaying the diffusion of Internet banking (McCahon, 1999; Long, 2000). In addition, lack of user‐friendly technology and consumer demand, high initial set‐up costs, redundancy of existing high cost legacy systems and lack of suitable skills have acted as inhibiting factors to many banks’ adoption of Internet banking (Daniel and Storey, 1997; Mols et al., 1999; Esser, 1999; Daniel, 1999; Howcroft and Lavis, 1986).

Given the research cited above, the case for this particular research is multifold. Diffusion of innovation research has tended to focus on consumer adoption (as opposed to corporate). It has also dealt more with manufacturing than service sectors. Thus an opportunity emerges to investigate diffusion of innovation in a services and corporate context. In addition, Internet banking is a young banking innovation with an unclear and uncertain future. Issues include the nature of the impact of Internet banking in the context of changes already occurring within the industry such as escalating competition, changing consumer behaviour and needs, globalisation, deregulation, disintermediation and the emergence of new financial services models. Further, despite the range of inhibiting and motivating factors identified regarding the diffusion of innovation, it is not known how useful these are in explaining the past adoption levels and predicting the future of Internet banking.

The objective of this study was to examine the nature of the factors inhibiting and motivating the adoption by banks of the Internet as a means of delivery of financial services. Rather than rely on past adoption, the study chose to focus on the future and the factors that would be instrumental in future bank adoption of the Internet. A futures perspective was selected, as, relative to the past, it is the future that remains uncertain and highly ambiguous, as confirmed by the exploratory interviews. The Delphi methodology, which is a tool for investigating the future, was the main component of the project.

The empirical programme for the research was as follows:

Exploratory interviews with banks – December 2000‐March 2001.

Development of Delphi questionnaire – Summer 2001.

Delphi questionnaire distributed (Round 1) – September 2001.

Delphi questionnaire distributed (Round 2) – December 2001.

Analysis (qualitative and quantitative) – Spring‐Summer 2002.

Delphi methodology

Delphi is a technique used in researching the future and forecasting. Delphi has been used in many areas ranging from medical research to business issues (Linstone and Turoff, 1979; Lang, 1994). Linstone and Turoff (1979, p. 574) described Delphi as “a method of structuring a group communication process so that the process is effective in allowing a group of individuals, as a whole, to deal with a complex problem”. Delphi is particularly applicable for complex problems, which require more judgemental analysis (Kaynak et al., 1994; Mitchell and McGoldrick, 1994), and for studies of industries that are undergoing rapid change (Jillson, 1979).

This methodology involves soliciting the opinions of experts over a series of rounds. The first round of a traditional Delphi study should discuss the general focus of the study. The second round gives feedback from the first round and asks for any revision of opinion in light of the findings and justification by those who provide deviating views (Delbecq et al., 1986). Feedback increases the level of information and furthers convergence (Rowe et al., 1991). The final round normally involves distribution of the justifications and the opportunity for panel members to agree or disagree with the justifications provided (Prendergast and Marr, 1994). The ultimate outcome is a forecast, policy or decision, (Lang, 1994). There are three quintessential aspects to a Delphi study, namely anonymity, controlled feedback, and statistical group response, whereby all individual responses are represented in the final outcome (Rowe and Wright, 1999).

Exploratory interviews

This research project started with exploratory interviews with key decision‐makers in banks in Ireland and the USA. These interviews aimed to identify the key themes and issues relating to the diffusion of the Internet and its adoption by banks. These themes informed the Delphi study, representing the next stage of the research. All interviews were conducted between December 2000 and March 2001. Those interviewed ranged from chief executive officers to senior vice presidents of electronic banking to electronic banking managers within retail banks. Personal interviews were used to afford greater exploration and time to probe and delve into the major emerging issues, (Fowles, 1984; Easterby‐Smith et al., 1995; Saunders et al., 2000). Transcripts of the taped interviews were subjected to thematic content analysis and thematic network analysis. Combined with the literature reviewed, this highlighted the key areas for investigation within the Delphi study.

The drivers examined within the study related to industry influences such as number of other banks adopting, competition, communication by other players and government intervention. Supply push and demand pull factors were incorporated within consumer demand and availability of technology. The remaining factors related to Internet banking as an innovation, namely suitability to industry exploitation, ease of development and trial of online facilities, possible advantage of enhancing ability to deal with customers and level of risk associated with adoption. The inhibiting factors were the inverse of the drivers as well as others. These other inhibiting factors were: the traditional image and activities within the industry, the lack of innovation culture within banking, the costs of adoption, general influence by other industry stakeholders, associated legal issues, perceived evidence of returns from Internet banking and, finally, technological inhibitors were considered in relation to existing legacy systems and lack of broadband width.

Findings from exploratory interviews

The key issues that emerged from the preliminary interviews related to the Internet and distribution strategy, the role of branches, functionality of Internet banking and competition between new entrants and established banks. Overall, the general theme or consensus emerged that the industry of the future would be very different. Space prohibits a complete reporting of the exploratory findings. Their key role in terms of this paper was to inform the Delphi questionnaire design. Their additional benefit was to underline the value of expert opinion in examining the complex issues of the future of Internet banking.

Delphi findings – the panel, rounds and response rates

The Delphi study was developed and conducted over the period June 2001 to December 2001. Respondents from various backgrounds were invited to participate since expertise on new media issues is housed in different industries and geographical locations. Potentially suitable panellists were identified from trade press, academic journals and consultancy reports. The authors compiled a US and European retail banks database from which a random sample of banks was drawn. All communication with panellists was via electronic mail. Panellists included decision‐makers from retail banking, non‐financial service entrants, technology and software suppliers and consultants and academics engaged in researching the banking industry. The panel had an international composition, drawing from throughout Europe and the USA. The use of electronic mail enabled such an international study to happen – the traditional postal service would have proved too time‐consuming and would have meant this study’s failure.

Initially, 71 individuals agreed to participate, with a breakdown of panellists illustrated in Table I.

Round one of the study commenced in September 2001, with a questionnaire being sent electronically to panellists. The questionnaire contained a total of 16 questions, with a mixture of Likert scale, multiple choice, sentence completion and open‐ended questions. The sections of the questionnaire covered factors influencing the rate of introduction of Internet banking, the implications of Internet banking and panellist classification questions. The initial intention was to allow two to three weeks for responses. In reality, this first Delphi round took eight weeks, an extension of some five to six weeks being necessary because of the terrorist attacks in the USA.

Altogether, 50 panellists responded via electronic mail and online, representing a response rate of 70 per cent. The second round was limited to responding via electronic mail due to difficulties experienced in the first round with the on‐line responses. In this round, 31 of the 50 panellists responded (62 per cent) with a breakdown of respondents illustrated in Table II. Round 2 gave statistical feedback to panellists about the group response and the individual’s response and asked for changes or answer justifications.

The study was deemed complete after two rounds. A number of factors led to this decision. First, the events of 11 September 2001 were dominating the time and energies of panellists such that a third round would have had a very high attrition level. Second, a degree of convergence had emerged: where there was divergence, there appeared little movement towards convergence. In any event, an element of divergence at the end of a Delphi study is as valuable as convergence of opinion.

High response rates were achieved (70 per cent in Round 1 and 66 per cent in Round 2). The preferred mode of response in Round 1 was electronic mail (68 per cent) in comparison with online (30 per cent). One respondent replied via mail, although no reason was provided for this; however, personal preference may have played a role. The majority of respondents in Round 1 and Round 2 were from the retail banking industry (44 per cent and 36.4 per cent respectively) in Europe (70 per cent and 69.7 per cent respectively). The majority of panellists, 44 per cent and 45.5 per cent respectively, in Round 1 and Round 2 replied after receipt of one reminder. Panellists were asked to rate their confidence in the accuracy of their responses. In Round 1, 64 per cent of the panellists were confident in their responses. This rose to 79 per cent of panellists in Round 2.

Delphi findings – drivers of Internet banking adoption by retail banks

The drivers of the diffusion of Internet banking were measured on a five‐point Likert scale ranging from “of very great importance” (5) to “of no importance” (1). In general, external factors were highlighted as the most important drivers in the overall decision to adopt. These include number of other retail banks adopting (32 per cent, n = 16), competitive forces (32 per cent, n = 16), consumer demand (28 per cent, n = 14) and technological availability (20 per cent, n = 10). The factors impacting upon the decision to adopt that were “of the greatest importance” were those variables identified by the panel. These are new revenue potential (n = 2), cost reduction (n = 7), security (n = 2) and access through other distribution channels (n = 1).

The seminal diffusion of innovation work by Rogers (1983, 1995) and Abrahamson and Rosenkopf (1990, 1997) informed the study with regard to drivers of Internet banking. Their models detail factors that impact upon the diffusion of an innovation (see Figures 1 and 2). The Abrahamson and Rosenkopf model is known as the “bandwagon model”.

From the pieces of seminal research the most important issues identified were competition (32 per cent, n = 16) and industry adoption (32 per cent, n = 16), low risk (12 per cent, n = 6), enhanced ability to deal with customers (26 per cent, n = 13), availability of technology (20 per cent, n = 10) and suitability of online facilities to banking (46 per cent, n = 23).

Owing to the nature of the Delphi methodology, convergence and divergence are key features of the eventual findings. The level of convergence between Round 1 and Round 2 was relatively low with a large element of divergence and only a small number of the deviant responses being altered in Round 2.

From Round 1, 2.86 per cent (n = 1) did not complete this question, 11.43 per cent (n = 4) did not deviate from the average with 85.71 per cent (n = 30) providing deviant responses and only 20 per cent (n = 7) of these altering their responses. A large percentage, 65.71 per cent (n = 23), maintained their original response. With a high level of deviant responses and global experts maintaining their original responses, convergence is quite low between rounds, with a high level of divergence in relation to the drivers of Internet banking adoption, as confirmed by the Wilcoxon Signed Rank Test.

Spearman’s Rank Order Correlation Test was performed to identify any significant relationships or correlations among the various drivers identified. This test revealed the following correlations as detailed in Table III.

A large number of moderate to strong significant correlations were identified at p <= 0.05. Only one correlation was negative, being the relationship between the drive for competitive advantage and the perceived decrease or increase in the ability to deal with customers. As the number of other retail banks adopting within the industry increases, the perceived drive for competitive advantage is also found to increase and drive diffusion further (rs = 0.666, p = 0.013). The perceived competitive advantage associated with adopting Internet banking increases as the ease of trial improves and the risk associated with adoption lowers, in addition to an increase in government intervention. As would be expected, increased consumer demand and increased availability of technology are positively correlated, leading to an increasing drive to adopt Internet banking (rs = 0.604, p = 0.029). The increased perceived suitability of banking to electronic media delivery increases as perceived availability of technology improves (rs = 0.584, p = 0.018). An interesting relationship was found in that, as communication by other industry members with regard to Internet banking increases, so too does the perceived level of competitive forces, the suitability of online facilities to banking, ease of development, enhanced ability to deal with customers and the lower associated risk. This relationship is logical – if positive industry communication is evident, retail banks perceive that adoption holds more merit and the situation is not as volatile or risky.

Internet banking adoption by retail banks is further driven by the perceived suitability of banking to the online environment. This is positively correlated with increased ease of development and trial, reduced risk and increased government intervention. Ease of development as a driver is positively correlated with increased ease of trial (rs = 0.753, p = 0.001), reduced risk (rs = 0.836, p = 0.000) and increased government intervention (rs = 0.517, p = 0.040). In addition, ease of development also increases as a driver as the perceived ability to deal with customers increases (rs = 0.755, p = 0.050). Finally, a moderately strong positive correlation was found between increased level of government intervention and a perceived reduction in the risk associated with adoption (rs = 0.560, p = 0.024). Government support leads to added credibility and stability.

Delphi findings – inhibitors of Internet banking adoption by retail banks

The inhibitors of Internet banking diffusion within the retail banking industry were measured on a five‐point Likert scale ranging from “of very great importance” (5) to “of no importance” (1). In contrast with the drivers, the most influential inhibitors to the introduction of Internet banking were mainly internal factors. The key inhibitors identified were lack of enhanced ability to deal with customers (30 per cent, n = 15) and existing system (42 per cent, n = 21) – both considered to be “of great importance”. The main variables identified as “of very great importance” were suggested by the panellists, namely PC ownership (2 per cent, n = 1), authentication issues (2 per cent, n = 1), ability to realise benefits from other channels (2 per cent, n = 1) and resistance to change (2 per cent, n = 1). The variables that were deemed of “no importance” in inhibiting diffusion of Internet banking were if it represented a competitive disadvantage (36 per cent, n = 18) or banking activities not being suited to on‐line facilities (38 per cent, n = 19).

This question was also informed by the research on diffusion of innovation carried out by Rogers (1983, 1995) and Abrahamson and Rosenkopf (1990, 1997) (see Figures 3 and 4).

From the seminal research of the variables included within these models, consumer demand (54 per cent, n = 27), availability of technology (44 per cent, n = 22), costs (38 per cent, n = 19), difficulty of trial (46 per cent, n = 23) and development (44 per cent, n = 22) and evidence of returns (38 per cent, n = 19) were found to be of “some importance” as inhibitors in addition to communication (54 per cent, n = 27) and influence by other industry members (46 per cent, n = 23).

The level of convergence between Round 1 and Round 2 was low. From Round 1 to Round 2 all panellists were asked if they would like to alter their responses in light of the average responses provided. Of these 62.86 per cent (n = 22) did not, while 37.14 per cent (n = 13) provided an alternative response. This result illustrates a small level of convergence of opinion between rounds in relation to inhibitors of Internet banking with a high level of divergence. This position was confirmed by the lack of significant findings from the Wilcoxon Signed Rank Test.

In order to identify any significant relationships or correlations among the various inhibitors identified a data reduction exercise was first performed and then a Spearman’s Rank Order Correlation Test. Table IV illustrates the correlation test findings in a matrix, for ease of reading. All the correlations identified in relation to the inhibitors of Internet banking ranged from moderately strong to perfect positive correlation. It is the intention to select the most interesting ones, as space does not permit exploration of these in detail.

Lack of innovation culture, one of the more significant variables, has a moderately strong to perfectly positive relationship with all the inhibitors identified therefore having a very negative effect on the rate of Internet banking adoption. A positive correlation was identified between increased legal issues and increasing issues regarding legacy systems (rs = 0.750, p = 0.012). Legal issues were also found to be positively correlated with enhanced ability to deal with customers (rs = 0.861, p = 0.006). A perfectly positive relationship was found between legal issues and perceived lack of evidence of returns, leading to the conclusion that retail banks are not prepared to adopt an innovation with associated legal debate when the returns are not obvious. Costs, considered to be a crucial deciding factor within the literature, in the adoption of Internet banking, are perfectly positively correlated with a number of variables. As costs are perceived to increase, so too does the importance of lack of consumer demand. Lack of influence and communication by other industry members, the increased difficulty of development of on‐line facilities and the associated legal issues lead to a situation of reduced adoption (rs = 1.000, p <= 0.05). These factors illustrate that costs remain a key deciding factor regardless of other industry members’ activities – if the development is perceived as difficult, with consumer demand being perceived as too low to merit incurring the costs involved, then retail banks remain deterred from adopting.

Delphi findings – future adoption of Internet banking

The global experts were asked to indicate the level of world‐wide adoption of Internet banking by 2011. The overall average response was 84.12 per cent. Responses ranged from 40 per cent to 100 per cent. To allow for extreme values and outliers the 5 per cent trimmed mean value was considered to be the most accurate and the consensus eventually developed at 85.13 per cent, deviating slightly from the normal mean of 84.12 per cent.

A further statistical test, Wilcoxon Signed Rank Test, was performed to illustrate the differences in average responses, if any, between Round 1 and Round 2. It was concluded that there were no significant differences (z = –0.222, p = 0.825) between Round 1 and Round 2 responses in this instance. This is the expected outcome due to only 14.28 per cent of panellists altering their responses in Round 2.

This paper presents three key sets of findings. These research findings relate to the drivers and inhibitors of industry adoption of Internet banking and the future level of adoption.

First, broadly categorised, external factors seem to be the key drivers, while factors internal to the retail banks inhibit further diffusion of Internet banking. Interestingly, the potential revenue available from Internet banking adoption and improved security present two new drivers to the diffusion of innovation literature. Risk, consumer demand, competitive forces, as others within the industry adopt, and technological issues remain crucial drivers. Correlation analysis showed that retail banks perceive competitive advantage is achievable through improved customer dealings, an advantage that Internet banking must clearly demonstrate. Further to this, positive communications lead retail banks within the industry to believe that adoption represents less risk and more benefits, thereby increasing the rate of diffusion. The issue of government support is perceived to lead to an increased rate of adoption whereby governments lend credibility and stability to a potentially risky innovation.

Second, the most significant findings were with regard to the inhibitors of Internet banking. The key inhibitors are mainly internal issues such as lack of enhanced ability to deal with customers, resistance to change, attitudes within the bank to this innovation, resources available and the existing legacy system. Other key concerns were if Internet banking represented a competitive disadvantage and therefore reduced the banks’ ability to deal with their customers (however, reality suggests the reverse of this relationship). Costs also became a strong inhibitor especially when retail banks perceive that returns are not evident and consumer demand is not sufficient. Returns and benefits from Internet banking adoption need to be apparent, especially in the context of the legal debate that surrounds Internet banking, for retail banks to be encouraged to adopt.

The conclusions drawn from the literature indicated a gap for the research conducted. Two seminal pieces of work, Rogers (1983, 1995) and Abrahamson and Rosenkopf (1990, 1997), informed the study and the data collection instrument. The findings in this instance support both Rogers’ and Abrahamson and Rosenkopf’s work. The key drivers that they identified are instrumental in explaining the diffusion of Internet banking – the key drivers being competition and industry adoption, low risk, enhanced ability to deal with customers and availability of technology.

Their work is also effective in mapping the inhibitors to the diffusion of Internet banking. While their original factors are confirmed, this study also identifies new inhibitors, namely resistance to change and internal attitudes. Since the literature on diffusion of innovation is relatively short on specific inhibiting factors, this provides a new enhanced perspective. In essence, the study has facilitated confirmation and extension of two existing diffusion of innovation models and theories.

Finally, according to this research, by 2011, 85 per cent of retail banks will have adopted Internet banking. This confirms the future importance of the electronic delivery channel. For this situation to transpire, the drivers are expected to become more effective whilst the inhibitors will diminish in their impact upon the overall rate of diffusion of Internet banking.

The implications of this research for bankers are numerous and wide‐ranging. Four of the more universal implications are outlined here:


1 The traditional innovation‐averse culture that pertains in many banks (but by no means all) needs to be overhauled for Internet banking is to become more prevalent. Indeed, there is a feeling that having an online presence is almost a proxy for being innovative. The inverse of this notion also holds – no online presence, no innovation. However, the scope and scale of required change within banks should not be under‐estimated.


2 This study has confirmed that the activities of key players are a crucial influence on other individual companies activities. This points to the importance of competitor intelligence and environmental scanning. Both can only be expected to increase over the coming decade.


3 Future world wide adoption is expected to be eight out of ten banks by 2011. This is indicative of the importance of Internet banking and the expected pace of adoption. Those retail banks that decide not to adopt Internet banking as part of their distribution strategy must either operate as niche players in the industry or re‐evaluate that strategy.


4 The adoption of innovation in commerce and society is seemingly inexorable. As consumers adopt, and come to expect Internet banking, and as competitors provide Internet banking, the nature of managerial challenges will change. However, on the basis of this study of international expert opinion, the question is not if but how and when banks adopt Internet banking.

The current research, although successful in exploring the diffusion of Internet banking, is subject, as with all research undertaken, to certain limitations. First, although the panel size was considered effective, globally a panel size of 70 is relatively small and therefore may bias the findings of the study with an uneven split between European and US representatives and indeed retail banks and non financial services entrants. Second, there may be other issues involved in the global decision to adopt Internet banking such as country specific drivers and inhibitors that were outside the scope of this study. Finally, the use of electronic mail, although very effective, may have influenced the degree to which panellists were prepared to respond. The conclusion drawn, however, is that this research has been successful in investigating a relatively uncharted global phenomenon. Only through further exploration will a holistic picture emerge.


Table I Global experts panel


Table II Breakdown of respondents


Table III Correlation of co‐efficient of main drivers of Internet banking adoption by retail banks


Table IV Correlation co‐efficients of main inhibitors of Internet banking adoption by retail banks


Figure 1 Rogers factors impacting upon the diffusion of Internet banking


Figure 2 Bandwagon factors influencing the diffusion of Internet banking


Figure 3 Rogers factors impacting upon the diffusion of Internet banking


Figure 4 Bandwagon factors influencing the diffusion of Internet banking

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