Determinants of customers` continued use of e-banking : a transactional, relational and socio-cognitive views

Abstract

Today, most – if not all – financial institutions, particularly banks, rely heavily on the internet to conduct their business. These organizations invested huge amounts of money on such technology to run their day to day operations. However, previous studies have proven that the eventual success of internet banking essentially depends on its continued use. Given that the long-term goal of any business entity is to increase its productivity, expand its customer base and maximize revenues, it is crucial for banks offering internet banking services to focus on encouraging their customers to continually use internet banking. This would ensure that their customers grow accustomed to these services and engage them with the advantages of such services by putting them to optimal use. While emerging attention had been given on the assessment of continued use of internet banking services in developed economies, little of attention were given from researchers in developing countries. Yet, it is believe that developing countries would benefited more from such research, so as to assist these organizations to utilize the limited resources – both financial and infrastructural facilities – wisely. Drawing on the literature, the current study aims to investigate the factors that affect continued use of internet banking. The foci of this study is the integration of seven factors from three different views (namely relational, transactional and socio-cognitive views) in a comprehensive model, using Libya – a developing country in Middle East region – as a case study. Furthermore, a mixed-methods approach was adopted in this study in order to gain the depth and breadth of the issues surrounding continued use of internet banking in developing countries. A number of important findings emerged from the quantitative and qualitative analysis. The results of statistical analyses using Partial Least Square (PLS) modeling and the results from interviews using ATLAS. ti where constant and show that, different to conventional wisdom, there is no significant impact of customer’s satisfaction on the level of trust using internet banking. Similarly, there is also lack of support found in this study to demonstrate the influence of satisfaction on customer’s willingness to recommend other people to use the services offered by the bank via internet. Despite such findings, majority of the result supports earlier research in this domain, hence highlight the strategic importance of internet banking to the financial sector in an emerging economy like Libya. Recommendations for policy and practice are provided at the end of the thesis, so as to highlight the contribution of this study.