Consumer perceptions of the barriers to adoption of internet banking: a case study in Libya

Consumer perceptions of the barriers to adoption of
internet banking: a case study in Libya

Banking services have been impacted by developments in information technology and considerable funds have been invested in the development of communications technology in the banking sector. E-banking is the major platform for adopting and using highly-developed IT systems in banking services. Evaluating an individual's acceptance of using e-banking technology, and Internet banking in particular, is a key issue facing the banking sector. Arguments remain about the most important factors that impact upon customers’ willingness to adopt Internet banking, despite considerable attention being paid to issues of assessment of the adoption of ebanking services in general, and Internet banking in particular. This study reviewed relevant IT literature which informed the development of an extension of the Technology Acceptance Model (TAM) by adding external factors with the aim of being more relevant for developing countries such as Libya. This study proposes an assessment methodology model to foster the adoption of Internet banking in Libya.

The study model included six constructs: Trust, Security, Customer Support, Internet Network Quality, Perceived Ease of Use and Perceived Usefulness. The study model considered perceptions of bank customers about these constructs relating to the adoption of Internet banking services. The instrument was designed to measure the attitudes of bank customers towards the adoption of online banking. A quantitative study was conducted with survey responses received from 536 Libyan bank customers. The findings confirmed that the study model is valid and reliable to measure the adoption of Internet banking from the point of view of customers’ perceptions; and the study model supported the relationships among the seven constructs.

The findings of the study indicate that Libyan bank customers perceive Internet banking to be risky but essential to development and growth of the economy. Bank customers are planning to adopt banking services through the Internet despite their concerns relating to factors such as security, trust, support and Internet quality that relate to Perceived Ease of Use (PEOU), and Perceived Usefulness (PU) of the new technology. The adoption of Internet banking technology may expand extensively in the Libyan banking sector in the near future. The use of Internet banking still presents number of challenging issues. Assessing the acceptance of Internet banking usage is seen as an important issue encountered by the banking sector. The key reasons behind the reluctance by users towards use online banking services include the persistence of factors that impact upon the adoption of e-banking services. The quantitative analysis of results from the survey questionnaire confirmed all the relationships in the traditional TAM, as well as the importance of trust and security in the new technology and issues relating to Internet network quality and support. Factors such as PU were confirmed in terms of their impact upon user or non-users’ intentions towards using new technology. PEOU was another major determinant factor influencing customers’ intention towards the use of Internet banking technology.

The study aims to make a contribution to practice and theory by providing a validated model to measure the willingness of consumers to adopt Internet banking
services. This study provides recommendations to Libyan commercial banks to assist them in the development of online banking services.