Customers’ Perceived Risk and Attitude towards Adoption of the Digital Banking Services

Abstract

Extensive use of technology in the banking sector has redefined the role of a modern banker and banks are not mere purveyors of credit but providers of a number of hi-tech services at the doorsteps of customers anytime, anywhere, and anyhow. The banking industry is currently witnessing healthy competition to adopt new technology. With the advent of Information Technology and its massive application in banking, the delivery of banking services has become more electronic and online. The demand for internet banking (IB) is necessitated by the growing e-commerce transactions and the paradigm shift in banking led by technology. From the perspective of both users and providers‘, IB is cost-effective, quick, and convenient. IB as a medium of delivering banking services is gaining acceptance from customers and is fast catching up in India particularly in Kerala with almost all the banks offering IB services to their customers. Customers are realizing the comfort of accessing banking services from home and as a result, a number of bank customers have already adopted IB or are on the threshold of adopting it. At the same time, we cannot ignore the various kinds of risks hidden in the IB services. Not only the technological factor but also the social, demographic, and even geographical factors also influence us for being digital. As a result of the currency demonetization from 8th November 2016, the demand for digital banking services has been increased. This is mainly because of the unexpected financial crisis that emerged due to currency demonetization. So it led to a new digital revolution in the field of the banking industry. Comparing to conventional banking services digital banking will provide a different experience to its customers. As a result of currency demonetization, many of the consumers were forced to adopt digital banking services. Hence this descriptive study is trying to reveal the great risk perceived by the banking customers in the banking services and the wild adoption of digital banking as a result of currency demonetization by taking samples from state bank of India and Kerala Gramin bank customers. This study sheds light on different aspects of consumers’ perceived risk to analyze the influence of total perceived risk and consumers’ willingness to embrace innovation on digital banking services adoption.