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The youth market for internet banking services:perceptions, attitude and behaviour

Vinh Sum Chau

Norwich Business School, University of East Anglia, Norwich, UK, and

Liqing W.L.C. Ngai

KellinWell-HK Electronics and Computing Ltd, Kowloon, Hong Kong

AbstractPurpose – This paper aims to investigate the perceptions, attitudes and behaviour of the youth market for internet banking services (IBS).Design/methodology/approach – A survey was carried out to acquire data from 164 respondents. The respondents were competent computer usersand studying for a degree at a university. Three additional in-depth interviews were subsequently carried out on interesting cases.Findings – The authors find that young people (age 16-29) have more positive attitudes and behavioural intentions towards using IBS than other user-groups. It has also confirmed that there is a positive impact of IBS quality on satisfaction and loyalty.Research limitations/implications – The study focused on an isolated convenience sample of university students in the UK. The findings might nottherefore have worldwide significance despite a large proportion of the students were international and from a good representation of minority ethicgroups.Originality/value – The research focused on a specific segment of the internet banking services market – younger students at a UK university. The

findings are useful for bank services marketing as the young are likely to become the most important segment of users as the worldwide web andbanking services become more advanced in the future.

Keywords Virtual banking, United Kingdom, Customer satisfaction, Customer services quality, Market segmentation, Young adults

Paper type Research paper

An executive summary for managers and executive

readers can be found at the end of this article.

Introduction

It has been over a decade since the mass internet revolution,

transforming mundane house-hold chores into point-and-

click activities: internet banking services (IBS) was one of

them. However, many customers are still not using IBS

(Gerrard et al., 2006). For those who do, they are not

necessarily fully satisfied with the quality or experience of use

(Walker and Johnson, 2005), and there is a whole host of

reasons for use relating to demographic and self-awareness

concerns as capacity to engage, perceived risks, and potential

advantages of use (Walker and Johnson, 2006). For the

banking industry, the internet provides excellent opportunity

for attracting a specific segment of customers, particularly the

young, who hold the greatest prospect for loan and mortgage

borrowing in the future (Lewis and Bingham, 1991). This

paper focuses on the youth market (we regard this as the age-

group 16-29) with a good educational background. Thesuccess of a financial service hinges on identifying the right

segments and then targeting its marketing programs to reach

the selected segments (McKechnie, 1992). The importance of

segmentation in the financial institution sector has been well

documented (e.g. Gwin and Lindgren, 1982; Speed and

Smith, 1992), but it is still not fully understood why some

segments are not attracted by it (Polatoglu and Ekin, 2001;

Rotchanakitumnuai and Speece, 2003; Sathye, 1999).

This paper explores specifically young customers’ beliefs,

attitude and behaviour towards the adoption of IBS. We start

by establishing some research hypotheses, based on extant

literature, in the areas of services and banking marketing and

service quality. With this research framework, we draw

findings from data collected from a questionnaire aimed at an

institution where the respondent group is most likely to fall

within a sample group of being young, educated, and have

close vicinity to internet services – a university.

Segmenting banking customers

Demography is a popular basis for segmentation, and is easier

to recognise and measure than most other variables (Meidan,

1996), particularly the age of the consumer (Stanley et al.,

1985). Financial institutions have responded to age segmentswith the development of a number of different products and

services (Lewis, 1981; Lewis and Bingham, 1991). Lewis et al.

(1994) suggest that young people have been characterised as

emphasising the importance of material possessions, being

more concerned with consumption than saving, and seeing

money as vital for personal success. This inevitably leads to a

variety of credit behaviours and borrowing requirements.

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0887-6045.htm

Journal of Services Marketing

24/1 (2010) 42–60

q Emerald Group Publishing Limited [ISSN 0887-6045]

[DOI 10.1108/08876041011017880]

Received: June 2007Revised: November 2007Accepted: February 2008

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With the increasing use of new technologies in marketing,

traditional methods of segmentation are not adequate and

efficient predictors of future buyer behaviour (McDougall and

Levesque, 1994). Benefit segmentation is proposed as a more

effective method, which partitions customers according to the

benefits they seek when purchasing a product or service

(Minhas and Jacobs, 1996). For banking services, four core

customer segments exist: the branch segment, the telephonesegment, the PC segment and the internet segment (Mols

et al., 1999). With the widespread use and adoption of the

internet, it is suggested the future retail banking structure will

consist of a few banks and many banks will rely on the

internet as their main distribution channel (Jayawardhena and

Foley, 2000).

Alfans and Sargeant (2000) find that it is possible to relate

perceived product/service benefits to one or more general

observable characteristics such as gender, age, and income,

etc. McDougall and Levesque (1994) confirm this finding

proportionally younger customers belonging to the

convenience segment, such as the PC/internet segment

(Katz and Aspden, 1997) and internet and e-commerce

users, are predominantly young (cf. Crisp et al., 1997). In

relation to internet banking in the youth market, we

hypothesise that:

H1a,b. There is a negative association between age and

attitude/intention towards using internet banking

services (IBS).

Attitude and behaviour

Being able to predict customers’ future behaviour is a critical

aspect of developing successful marketing strategies. It is

therefore important for a marketer to understand and

influence consumers’ behaviour. We focus on the theory of

reasoned action (TRA) and the technology acceptance model

(TAM) to postulate an internet banking adoption researchframework to guide the study.

Theory of reasoned action (TRA)

An important concept in the study of consumer behaviour is

consumer attitude, which has been defined as a person’s

overall evaluation of a concept (Peter et al., 1999), which

assumes that the more positive a person’s overall evaluation of

a product/brand, the more likely the person is to buy or use it.

In many cases, however, knowledge of a person’s attitude is

not a good predictor of behaviour. Fishbein and Ajzen’s

(1975) theory of reasoned action (TRA) is a widely studied

theoretical model of consumer behaviour (Ajzen and

Fishbein, 1980; Davis, 1989; Ha, 1998). TRA was

developed to explain how a consumer is lead to a certain

buying behaviour. It asserts that actual behaviour follows

from behavioural intention and that behavioural intention is

formed by one’s attitude towards behaviour and subjective

norm.

Technology acceptance model (TAM)

The technology acceptance model (TAM) introduced by

Davis (1989) is an adaptation of TRA specifically tailored to

explain the use of information technology. The purpose of

TAM is to explain the determinants of computer acceptance

and user behaviour across a broad range of new technologies

(Davis and Venkatesh, 1996). Based on TRA, TAM focuses

on two perceptions – perceived usefulness and perceived ease

of use, to predict users’ acceptance of new technology.

Perceived usefulness is seen as the degree to which a person

believes that a particular system would enhance his or her job

performance, and perceived ease of use, in contrast, refers to

the degree to which a person believes that using a particular

system would be free of effort (Davis, 1989), both of which

are determinants of attitude towards usage intentions andactual information technology usage. Any other factors not

explicitly included in the model are expected to influence

intentions and usage through perceived ease of use and

usefulness (Davis et al., 1989). These external variables might

include system design features, training, computer self-

efficacy, user involvement in design, and the nature of the

implementation process (Venkatesh and Davis, 1996). Some

have over the years added constructs to TAM to enhance its

predictive power, such as social influence (Malhotra and

Galletta, 1999), prior experience (Taylor and Todd, 1995a),

and availability of user training and support (Karahanna and

Straub, 1999). The internet is different from, and of course

newer than, existing technologies, such as conventional

telecommunications for which customer service expectationsare well established (for example, see Chau, 2002). As the

internet provides the promise of a new direct interactive

shopping/communications channel that is not bounded by

time or geography, studies that have applied a simple TAM

approach for how people accept the web or e-commerce is

unlikely to accurately predict acceptance; this is because a

conventional TAM approach would normally take such issues

as time taken for the transaction or the physical ease of

accessing the technology as key factors of consideration,

whereas access to the internet for banking services is

immediate (for security and encryption purposes), operates

in a real time context, and the banking service is accessible

from any internet terminal located anywhere in the world.

Internet banking adoption research framework

Based on the above TRA and TAM, we postulate an internet

banking adoption research framework (Figure 1) to establish

further hypotheses.

The variables for examination used in the study were as

follows:

Self-efficacy

Self-efficacy refers to individuals’ beliefs in their ability to

perform certain actions (Bandura, 1977, 1982), and is

regarded as a major determinant of choice activities, degree of

effort, period of persistence, and level of performance in

challenging situations (Yi and Venkatesh, 1996). In this study,

self-efficacy is referred to as an individual’s perceived ability touse IBS. Studies on the effects of self-efficacy point to its

crucial role in determining individual behaviour towards using

information technologies (e.g. Compeau and Higgins, 1995;

Taylor and Todd, 1995b). Venkatesh and Davis (1996)

support the role of an individual’s self-efficacy as an

antecedent and determinant of ease-of -use of new

technology. In other words, users with higher self-efficacy

are more willing to learn a new technology. Hence, we

hypothesise that:

H2. Young customers’ self-efficacy is positively associated

with their perceived ease of use of IBS.

The youth market for internet banking services

Vinh Sum Chau and Liqing W.L.C. Ngai


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Perceived risk

The concept of perceived risk was first introduced to explain

such phenomena as information seeking, brand loyalty,

opinion leaders, reference groups and pre-purchase

deliberations (Bauer, 1964), asserting that consumer

behaviour involves a risk that any action of a consumer may

lead to unpleasant consequences (Ho and Ng, 1994; Cox,

1967; Peter and Ryan, 1976; Stone and Gronhaug, 1993).

Jarvennpaa and Todd (1996) identify five types of risk in

online shopping:

1 Economic risk (the risk of monetary loss arising from

online shopping).

2 Social risk (acceptance of online shopping behaviour by

other society members, such as family members, friends,

etc.).

3 Performance risk (whether the purchased products or

services are able to meet customer’s expectation).

4 Personal risk (risk of any harm to the customers because

of the purchase behaviour).

5 Privacy risk (loss of right of privacy).

These risks are used in the present study and assumed

appropriate for IBS.

Consumers are more likely to associate a higher level of risk

with non-store purchases, such as through the internet (Cox

and Rich, 1964; Engel and Blackwell, 1970; Simpson and

Lakner, 1993; Tan, 1999), than with in-store purchase

decisions (Akaah and Korgaonkar, 1988). Purchasing

methods that are riskier are therefore assumed to be less

used (to avoid the risk), and by analogy are perceived as less

useful. Hence, we expect that customers perceive a higher

level of risk when using IBS than through in-store means, and

therefore find IBS less useful. We hypothesise the same

analogy for young customers that:

H3. Young customers’ perceived risk is negatively

associated with their perceived usefulness of IBS.

Social influence

Social influence attempts to understand the changes brought

about in individuals’ attitude by external inputs, such as

information communicated to them. In TRA, Fishbein and

Ajzen (1975) used the term “subjective norm” to describe

social influence. Kelman (1958) suggested that individual

behaviour affected by social influence might occur at three

dif ferent stages: com pliance, identification and

internalisation. Applied to a new information system, the

social influence process determines the individual user’s

commitment to the use of any new information technology

(Malhotra and Galletta, 1999). The salience of social

influence on technology acceptance behaviours has been

acknowledged (Schmitz and Fulk, 1991). Karahanna and

Straub (1999) report that the existence of a strong

relationship between social influence and technology usage

via perceived usefulness suggests that social influence might

be operating via the process of internalisation.

TRA posits that social influence has a direct effect on

behavioural intention (Ajzen and Fishbein, 1980; Fishbein

and Ajzen, 1975). Davis et al. (1989) anticipate that social

influence might influence behavioural intention directly via

compliance. However, Malhotra and Galletta (1999) suggest

that processes of social influence have no direct effect on

behavioural intention. Thus, this study tests the following two

hypotheses:

H4a,b,c. Young customers’ f eeling of com pliance/

identification/internalisation generated by social

influence is positively associated with their

perceived usefulness of IBS.

H5a,b,c. Young customers’ f eeling of com pliance/

identification/internalisation generated by social

influence is positively associated with their

behavioural intention to the use of IBS.

Perceived ease of use and perceived usefulness

To gain a better understanding of the cognitive processes

people use to respond to IT regarding beliefs, attitudes,

intention and behaviour, the effects of perceived ease of use/

perceived usefulness on attitude and usage intention are both

considered. The easier to use the technology, and the more

useful it is perceived to be, the more positive one’s attitude

and intention t owards us ing that t echn ol og y.

Correspondingly, the usage of the technology increases.

Therefore, this study tests the following five hypotheses:

H6 . Young customers’ perceived ease of use (EOU) of IBS

is positively associated with their attitude towards the

use of IBS.

H7 Young customers’ perceived usefulness (U) of IBS is

positively associated with their attitude towards the use

of IBS.

H8 . Young customers’ perceived ease of use (EOU) of IBS

is positively associated with their behavioural intention

to the use of IBS.

H9 . Young customers’ perceived usefulness (U) of IBS is

positively associated with their behavioural intention to

the use of IBS.

H10 . Young customers’ attitude towards the use of IBS is

positively associated with their behavioural intention to

the use of IBS.

Figure 1 Research framework 1: internet banking adoption research framework




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Service quality, customer satisfaction andcustomer loyalty

E-commerce changes the relationships between sellers and

buyers dramatically. One of the business sectors most heavily

affected is banking (Methlie and Nysveen, 1999), and as the

web becomes more mainstream and increasingly larger

proportions of the population become web users, the morecomplex the challenge of establishing and maintaining

customer loyalty becomes (Windham, 2000).

The relationship between service quality and customer

satisfaction

Product/service quality is a key element of a business

achievement (Dale, 1999). As a critical measure of

organisational performance, service quality remains at the

forefront of the services marketing (Jensen and Markland,

1996; Cox and Dale, 2001). Adequate tools for measuring

service quality are one of the important issues of service

quality (Lee et al., 2000). The two most well-known and

widely accepted measurement tools are the SERVQUAL

model (Parasuraman et al., 1985, 1988) and the technical/

functional quality model (Gronroos, 1983, 1990).SERVQUAL regards service quality as a function of

customer pre-purchase expectations, perceived process

quality and perceived output quality. Service quality is the

gap between customers’ expectations of service and their

perceptions of the service experience. In the functional/

technical quality model, what the consumer receives in his/her

interactions with the service firm is the technical quality and

how the customer receives a service is the functional quality; it

is used less extensively than SERVQUAL (Lassar et al., 2000),

and is argued to be less useful than SERVQUAL (Joseph et al.,

1999; Cronin and Taylor, 1992), although perhaps a

combination of the models may be helpful (Berry and

Parasuraman, 1997).

Service quality is especially important for the interfacebetween customer and internet (Cox and Dale, 2001). The

differences between the physical service environment and the

website interface are key factors in suggesting whether

previous service quality research is applicable to the e-

business environment. In the technical/functional quality

model, the technical quality of IBS is the quality of the

financial service provided by the bank through its website. In

a traditional banking service, the interaction between bank

and customers is interpersonal, that is, between the

representatives of the bank and the customers. Lassar et al.

(2000) measure a bank’s functional quality by assessing

customers’ views of the bank representatives. Since IBS is

delivered over the internet, the representative of the bank is its

website. Thus, the quality of the bank website determines the

functional quality of this service. WebQual is a method

introduced by Barnes and Vidgen (2000a, b, c, 2001) for

assessing the quality of websites.

Customer satisfaction is regarded as the feeling or attitude

of a consumer towards a product/service after it has been used

(Solomon, 1996; Wells and Prensky, 1996), and this is

important for establishing customer loyalty (Metawa and

Almossawi, 1998; Cronin and Taylor, 1992). Although the

relationship of the quality/satisfaction (i.e. quality leads to

satisfaction) is fairly well understood for services, there is a

dearth of empirical research on the quality/satisfaction

relationship for IBS. This is particularly so for IBS quality/

satisfaction from the technical/functional quality model

perspective. If this relationship is consistent with previous

studies, marketers can identify which categories of IBS quality

is more important to young customers (i.e. technical or

functional). Thus, the study tests the hypothesis:

H11a,b. Young customers’ evaluation of technical/

functional quality of IBS is positively associated

with their technical/functional quality satisfactionof IBS.

The relationship between customer satisfaction and

customer loyalty

Draker et al. (1998) divide the construct of loyalty into its

behavioural, cognitive and affective elements. Behavioural

loyalty is a customer’s actual purchase behaviour; cognitive

loyalty is the intentions of future behaviour expressed by the

customer; and affective loyalty is the attitude of the customer

to the company. Customer satisfaction is considered a

necessary condition for customer retention and loyalty.

Stauss and Neuhaus (1997) argue that although it seems

perfectly logical that dissatisfied customers are more willing to

break up a relationship than satisfied customers (e.g. Bloemer

et al. 1998; Nguyen and LeBlanc, 1998), it is doubted if

satisfaction is a sufficient guarantee for customer loyalty. We

therefore hypothesise that:

H12a,b. Young customers’ technical/functional quality

satisfaction of IBS provided by an internet bank

is positively associated with their loyalty to this

bank.

There is some work on the indirect effect of service quality on

customer loyalty and the mediating role of corporate image on

customers’ loyalty (e.g. Bloemer et al., 1998; Nguyen and

LeBlanc, 1998), focusing on the complex relationships

between image, service quality, customer satisfaction and

customer loyalty. For simplicity, our study investigates onlythe direct relationship between IBS quality, customer

satisfaction and customer loyalty, as shown in Figure 2.

Methodology

Sample and data collection

A face-to-face administered questionnaire was used to collect

data from a quota sample of at least 50 respondents from the

young and non-young age groups (to ensure a more than

statistically significant comparison can be made between the

groups); it was also a convenience sample because data

collection took place at an IT suite of a university located in

the East Anglia region of the UK where it was certain that a

young, well-educated and IT-minded sample would be found.

Data collection took place over a one-week period, with a

response rate of approximately 70 per cent of those

approached, and data collection ceased when there did not

seem to be any new people available.

Data from 164 respondents were collected, of which 84

were from the younger group (aged 16-29 years) and the

remainder were from non-young group (aged 30 þ ). Of the

84 young respondents, 41 were IBS users and 43 were non-

IBS users. To test our hypotheses, the data were separated as

follows: (dataset A) a sample which includes four age groups

(ages 16-29, 30-39, 40-49, 50 þ ); (dataset B) a sample aged

16-29 years (based on dataset A); and (dataset C) a sample




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aged 16-29 who used IBS (based on dataset B). Threeadditional in-depth interviews (dataset Q) were conducted on

interesting cases that helped to clarify the points made in the

discussion of the findings. No specific interview schedule was

used for this as this would have over-burdened the

respondent; instead, questions were only asked to clarify

matters. Table I summarises the demographics of the sample.

Measures used in the questionnaire

The questionnaire design was based primarily on multiple-

item measurement scales taken from previous research

(Baker, 1991; Churchill, 1979), and all the instruments

were developed using seven-point rating scales (Green and

R ao, 1 97 0) . To ensure adequate w ording f or the

questionnaire (Oppenhein, 1996), a pilot test was

conducted on 20 respondents and one practice interview,after which modifications were made before the real data

collection. The questionnaire (Appendix 1) is composed of

three sections.

Section 1 was to determine whether age is related to

attitude and behavioural intentions towards using IBS. Based

on Ajzen and Fishbein (1980), a four-item attitude scale was

developed. A semantic differential bi-polar rating scale was

used to measure the respondents’ attitude towards using IBS

(Churchill, 1995). The instrument asked the individuals to

rate the four items according to their views on IBS. These

items used a seven-point scale with the following adjectives:

bad/good, harmful/beneficial, foolish/wise, and negative/

positive, consistent with extant TAM research (e.g.

Malhotra and Galletta, 1999). Behavioural intention was

measured by asking to indicate how likely respondents were to

use IBS in the future (ceteris paribus).

Section 2 was to measure the following components of our

research framework: external variables (self-efficacy,

perceived risk and social influence), perceived usefulness,

and perceived ease of use of IBS, so to examine how theserelate to one another and to respondent attitudes and

behavioural intentions towards the use of IBS. To limit the

number of questions in the study, self-efficacy was measured

using a three-item scale based on Taylor and Todd (1995b),

and the respondents were asked to give their level of

agreement or disagreement on a seven-point Likert scale

anchored with the values “strongly disagree” (value 1) and

“strongly agree” (value 7). The instrument used to measure

consumers’ perceived risk was developed from Jarvenpaa and

Todd’s (1996) descriptions of types of perceived risk in online

shopping. The respondents were given three unfavourable

statements and asked to indicate the likelihood of each

happening. An extra statement was given to measure the

respondents’ overall risk perceptions when considering all the

factors combined. Social influence was measured in terms of Kelman’s (1958) three processes of social influence –

compliance, identification and internalisation. Malhotra and

Galletta’s (1999) 12-item scale was adjusted to measure the

social influence on the adoption of IBS. The items used to

construct perceived usefulness (U) and perceived ease of use

(EOU) were adopted from Davis and Venkatesh (1996).

Individuals were asked to indicate the extent of agreement or

disagreement with four statements for U and four statements

for EOU, also based on a seven-point scale.

Section 3 was to determine the relationship of IBS users’

opinions of the quality of IBS, their satisfaction with IBS and

loyalty to the internet bank. IBS quality was measured from

the technical/functional quality perspective of service quality.

Based on Lassaret al.

(2000), an eight-item, seven-pointLikert-type scale was developed to measure the technical

quality of IBS (shown at Appendix 2). Functional quality of

IBS was measured using WebQual 4.0, developed by Barnes

and Vidgen (2001), to assess the quality of the websites. The

respondents were asked to evaluate the website of the bank by

Figure 2 Research framework 2: service quality-customer satisfaction-customer loyalty relationship

Table I Sample demographics

Number

Dataset Questions Respondent age range Total Male Female Percentage of sample

A Section 1 16-291 84 43 41 51.2

30-39 27 14 13 16.5

40-49 27 14 13 16.5

50 þ 26 13 13 15.9Total – – 164 84 80 100

B Section 1 16-292 84 43 41 100

Section 2

Total – – 84 43 41 100

C Section 1 16-293 41 21 20 100

Section 2

Section 3

Total – – 41 21 20 100

Q Open interview 16-294 3 1 2 100

Total – – 3 1 2 100

Notes: 1, 2Were the same group of respondents; 3Was chosen from 2; 4Was chosen from 3




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using a 20-item, seven-point Likert scale (shown as

Appendix 3) where the anchors are 1 ¼ “strongly disagree”

and 7 ¼ “strongly agree”. Customer satisfaction was

measured using a two-item, seven-point numeric rating

Likert-type scale. These two items were to capture the

respondents’ overall satisfaction with the functional quality of

IBS and their overall satisfaction with the technical quality of

IBS – which accords with Nguyen and LeBlanc (1998) – sotwo behavioural intention items were also used as surrogate

indicators of loyalty.

Findings and data analysis

Dataset A: segmentation

To test H1a/H1b for the difference between the means of

respondents’ attitude and behavioural intention towards using

IBS, a one-way analysis of variance test (ANOVA) was used.

The mean scores of the attitude of the respondents aged 16-

29, 30-39, 40-49, and 50 þ , were 5.693, 5.509, 4.444 and

3.567 (F ¼ 38:860, p , 0.01) respectively (shown at Table

II). This suggests that most people aged 16-29 and 30-39

have a positive attitude towards using IBS whereas most

people aged 40-49 have a neutral attitude and most people

aged 50 þ have a negative attitude. A Tukey HSD post hoc

test was then conducted to make multiple pairwise

comparisons among the means of the attitude variable of

each age group to establish which were significantly different

from each other. The multiple comparisons indicate that the

average mean scores of the attitude for both age groups of

16-29 and 30-39 are significantly different from those of the

other age groups but not from each others (Table III). The

average mean score of the attitude of the age group of 40-49

differed significantly from that of the age group 50 þ . The

age group 16-29 recorded the highest attitude scores with the

age group 50 þ recording the lowest. Therefore, H1a can be

accepted that there is a negative association between age and

attitude towards using IBS.Similarly, the calculated mean scores of behavioural

intention of the respondent ages 16-29, 30-39, 40-49 and

50 þ were 5.333, 4.543, 3.481 and 2.205 respectively (shown

at Table II) ( F ¼ 33:336, p , 0.01), and indicates that most

people aged 16-29 were more likely to use IBS in the future

than other age groups. The average intention mean scores for

age groups 16-29 and 30-39 are significantly different from

those of other age groups, but not from each other (shown at

Table III). The average intention mean score for the age

group of 40-49 differed significantly from that of the age

group of 50 þ . The ANOVA results suggest that H1b can be

accepted, that there is a negative association between age and

behavioural intention to use IBS and people aged 16-29 have

a more positive intention to use IBS in the future than people

in other age groups.

Dataset B: internet banking adoption research

framework

We assume a linear relationship between self-efficacy and

perceived ease of use. To test H2 for the correlation between

these two variables, each respondent’s average self-efficacyscore and average perceived ease of use score was calculated.

The Pearson correlation coefficient (r ) for the relationship of

self-efficacy to perceived ease of use was 0.689 ( p , 0.01),

accepting H2 that self-efficacy and perceived ease of use are

strongly and positively related. The correlation coefficients for

all the other variables were also calculated, and presented in

Table IV.

An overview of the correlation between perceived risk and

perceived usefulness, and the correlation between

compliance/identification/internalisation and perceived

usefulness shows that all of the correlation coefficients are

significant ( p , 0.01). There is a negative relationship

between perceived risk and perceived usefulness

(r ¼ 20:576), compliance and perceived usefulness

(r ¼ 20:

261) , and a positive relationship betweenidentification and perceived usefulness (r ¼ 0:569), and

internalisation and perceived usefulness (r ¼ 0:579).

Therefore, H3 and H4b/H4c may be accepted, while H4a

must be rejected.

Some independent sample t-tests were conducted to

explore the significant differences between those who use

(“yes”) and do not (“no”) for each of the test variables (as

shown in Table V). The mean scores of self-efficacy

experienced by IBS users and non-IBS users were 5.861

and 4.581 respectively. An observed t -value of 4.678 was

attained ( p , 0.05; df ¼ 82) concluding that IBS users do

experience significantly higher levels of self-efficacy than non-

IBS users.

To gain further insight into the effects of the relevantvariables on perceived usefulness of IBS, the multiple

regression analysis was used. Thus, a regression model can

be specified:

U ¼ b 0 þ b 1 £RISK þ b 2 £ SOCOM þ b 3 £ SOIDE

þ b 4 £ SOINT þ 1. . . ð1Þ

The explained variance of U by RISK, SOCOM, SOIDE and

SOINT is 60.2 per cent (R2 ¼ 0:602, R2adj ¼ 0:581). The

ANOVA values (shown in Table VI) indicate that regression

model 1 is significant ( F ¼ 29:814, p , 0.01), and R2 is

significantly different from zero; there is a linear relationship

between the predictors and the dependent variable. The beta

Table II Descriptive data on attitude and intention towards the use of IBS

Attitude Intention

Age n % Mean SD Std error Mean SD Std error

16-29 84 51.1 5.694 0.924 0.101 5.333 1.431 0.156

30-39 27 16.5 5.509 0.548 0.106 4.543 1.977 0.380

40-49 27 16.5 4.444 1.427 0.275 3.482 1.224 0.236

50 1 26 15.9 3.567 0.773 0.152 2.205 1.330 0.261

Total 164 100.0 5.120 1.246 0.000 4.402 1.881 0.147

ANOVA: F ¼ 38:860, p , 0.01 ANOVA: F ¼ 33:336, p , 0.01




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Table IV Correlation coefficients between variables for research framework 1

Variables 1 2 3 4 5 6 7 8

1. SELF –

2. EOU 0.689 * * –

3. RISK NS NS –

4. U NS NS 20.576 * * –

5. SOCOM NS NS NS 20.261 * –

6. SOIDE NS NS NS 0.569 * * NS –

7. SOINT NS NS NS 0.577 * * NS – –

8. ATTITUDE NS 0.700 * * NS 0.469 * * NS NS NS –

9. INTENTION NS 0.574* *

NS 20.636* *

NS 0.435* *

0.438* *

0.472* *

Notes: NS ¼ not significant; *p , 0.05 (2-tailed); * *p , 0.01 (2-tailed); Where: SELF ¼ self-efficacy; EOU ¼ perceived ease of use; RISK ¼ perceive risk; U=perceived usefulness; SOCOM ¼ social influence-compliance; SOIDE ¼ social influence-identification; SOINT¼ social influence-internalisation;ATTITUDE ¼ attitude towards use; INTENTION ¼ intention to use IBS

Table V Independent sample t -tests

Test variables Use Mean t df Sig. (two-tailed)

Self-efficacy Yes 5.861 4.678 * * 82 0.000

No 4.581

Perceived risk Yes 3.085 22.001*

82 0.049No 3.517

Perceived ease of use Yes 5.414 4.492 * * 82 0.000

No 4.401

Perceived usefulness Yes 5.378 2.736 * * 82 0.008

No 4.773

Attitude Yes 6.134 4.857 * * 82 0.000

No 5.273

Intention Yes 6.065 5.259 * * 82 0.000

No 4.635

Notes: *p , 0.05 (two-tailed); * *p , 0.01 (two-tailed)

Table III Multiple comparisons (Tukey HSD post hoc tests) of attitude and intention of four age groups

Independent variables

Attitude Intention

(I) Age J (Age) Mean difference (I-J) Sig Mean difference (I-J) Sig

16-29 30-39 0.184 NS 0.790 NS

40-49 1.249 * * 0.000 1.851 * * 0.000

50 þ 2.126 * * 0.000 3.128 * * 0.00030-39 16-29 20.184 NS 20.790 NS

40-49 1.064 * * 0.000 1.061 * 0.044

50 þ 1.942 * * 0.000 2.338 * * 0.000

40-49 16-29 21.249 * * 0.000 21.851 * * 0.000

30-39 21.064 * * 0.000 21.061 * 0.044

50 þ 0.877 * * 0.005 1.276 * * 0.010

50 1 16-29 22.126 * * 0.000 23.128 * * 0.000

30-39 21.942 * * 0.000 22.338 * * 0.000

50 þ 20.877 0.005 21.276 * * 0.010

Notes: *p , 0.05 level; * *p , 0.01 level; NS ¼ not significant




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coefficients shown in regression model 1 indicate that both

SOIDE (b ¼ 0:286, p , 0.01) and SOINT (b ¼ 0:340,

p , 0.01) have a significantly positive impact on U, and that

both RISK (b ¼ 20:317, p , 0 .01 ) a nd SO COM

(b ¼ 20:227, p , 0.01), have a negative impact on U.

The other hypotheses belonging to the same dataset were

interpreted in the same way. Hence the following regression

models were also employed:

ATTITUDE ¼ b 0 þ b 1 £ EOU þ b 2 £U þ 1. . . ð2Þ

INTENTION ¼ b 0 þ b 1 £ SOIDE þ b 2 £ SOINTE

þ b 3 £ATTITUDE þ b 4 £ EOU þ b 5

£U þ 1. . . ð3Þ

EOU in regression model 2 shows a strong positive influence

upon ATTITUDE (b ¼ 0:616, p , 0.01) whereas U has only

a small influence (b ¼ 0:179, p , 0.05). With regression

model 3, only EOU (b ¼ 0:356, p , 0.01) and U (b ¼ 0:348,

p , 0.01) have a significant (positive) influence upon

INTENTION. From the results of the regression analyses,

we accept H5, H6, H7, H8, H9 and H10 .

Dataset C: service quality ! customer satisfaction !

customer loyalty

To explore the answers for the hypotheses relating to researchframework 2 on the relationship between service quality and

customer satisfaction, and between customer satisfaction and

customer loyalty, further correlation coefficients were sought;

these are shown at Table VII. The results indicate that all

H11a (r ¼ 0:672, p , 0.01), H11b (for all three variables,

r ¼ 0:573, r ¼ 0:578 and r ¼ 0:638, p , 0.01), and H12a/

H12b (r ¼ 0:656, r ¼ 0:577, p , 0.01) may all be accepted.

Further regressions models were formulated: firstly, to

compare the contribution of the three components of the

functional quality of IBS to the prediction of functional

quality satisfaction, in the form of:

FQS ¼ b 0 þ b 1 £ FQUSA þ b 2 £ FOINF þ b 3

£ FQINT þ 1. . . ð4Þ

(where FQS ¼ f un ct io na l q ua li ty s at is fac ti on ;

FQUSA ¼ functional quality-usability; FQINF¼ functional

quality-information; FQINT ¼ f unctional quality-

interaction), and to compare the effects of technical/

functional quality satisfaction of IBS on loyalty:

LOYALTY ¼ b 0 þ b 1 £TQS þ b 2 £ FQS þ 1. . . ð5Þ

(w he re TQ S¼ technical quality satisfaction and

FQS ¼ functional quality satisfaction).Only FQINT in regression model 4 shows any significant

influence on FQS (b ¼ 0:441, p ¼ 0:012). With regression

model 5, only TQS shows any significant influence on loyalty

(b ¼ 0:491, p , 0.01).

Dataset Q: qualitative interviews

The three interviews conducted on respondents considered

“interesting” were tape recorded, and a full transcription was

kept. Each interview lasted about 40 minutes, and

respondents commented mainly on the reasons they chose

to use IBS, what they expected from their banks, and if their

internet bank met their expectations. On balance, they

commented mostly on factors such as security, convenience,

and functional use (quality of the web site) as the key reasons

for their use or non-use. These qualitative findings were

supportive of the regression models, as well as being

consistent with the literature (Rotchanakitumnuai and

Speece, 2003; Sathye, 1999).

Discussion and managerial implications

The significance of segmentation

Our results are consistent with the opinion of Crisp et al.

(1997) that older individuals have to exert more cognitive and

emotional effort to learn new behaviours and dissociate

themselves from their daily routines. These also support Katz

Table VI Multiple regression results for regression models 1-5

ANOVA

Regression model Dependent variable Predictor variables Beta Sig. R 2

R 2adj F Sig.

1 U RISK 20.317 0.000 0.602 0.581 29.814 0.000

SOCOM 20.227 0.006

SOIDE 0.286 0.004

SOINT 0.340 0.0002 ATTITUDE EOU 0.616 0.000 0.516 0.504 43.109 0.000

U 0.179 0.044

3 INTENTION ATTITUDE – – 0.522 0.491 17.031 0.000

SOIDE – –

SOINT – –

EOU 0.356 0.002

U 0.348 0.003

4 FQS FQUSA – – 0.467 0.424 10.805 0.000

FQINF – –

FQINT 0.441 0.012

5 LOYALTY TQS 0.491 0.004 0.462 0.434 16.344 0.000

FQS – –




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and Aspden’s (1997) findings that the internet banking

segments consist mostly of younger customers. Although

people aged 30-39 years have a less positive attitude and

intention towards using IBS than the younger group, they

have a more positive attitude and intention than the other two

age groups (aged 40-49 and 50 þ years). Those aged 30-39

years have been in their careers for some years, and have

higher levels of income than those of the younger group, whoare typically highly mobile in their early careers. This

inevitably leads to a variety of financial service requirements

of the people aged 30-39 years. This supports the assumption

of Lewis and Bingham (1991) that attracting young customers

should be profitable for financial institutions in the future.

The younger customers’ disposable incomes are seen to be

low (relative to non-younger customers), but their

discretionary incomes and purchasing power are high. We

suggest that IBS marketers see the longer term gains by

attracting young customers as “future revenues” which can be

generated from loyal customers. With the growth of the IBS

younger customers segment, IBS marketers must focus on

comprehending this target customer base and deliver

consistently to their specific demands. In the case of our

sample (university students), the offer of student and graduateaccount benefits (e.g. interest-free overdrafts, offer of credit

cards, and discounted loans and mortgages, etc.) is strongly

encouraged. The exact composition of such account benefits

may be the result of further market research into what exactly

graduate students require.

Internet banking adoption research frameworkSelf-efficacy ! perceived ease of use

Self-efficacy plays an important role in shaping individual’s

feelings about using IBS. This result supports Venkatesh and

Davis’ (1996) findings that self-efficacy is an antecedent and

determinant of EOU. Hence, we argue that there is value in

IBS marketers to focus their strategies on enhancing young

customers’ self-efficacy of using IBS. To many financial

institutions, internet banking as a newly-emerging delivery

channel of financial services, is still at the introduction or

early growth stage of the product lifecycle. The well-known

marketing principle is that it costs five times as much to

obtain a new customer than to retain an existing one: so by

targeting innovators and early adopters of IBS (who are

typically young people) during the early stages of the IBS

lifecycle will be highly invaluable in gaining a stronger future

acceptance during the growth and maturity stages of the life

cycle. The IBS users in this study were found to have higher

levels of self-efficacy perception of using IBS than non-IBS

users. As for the potential customers who might not have a

high level of self-efficacy of using IBS, IBS marketers can

enhance customers’ confidence in their ability to use IBS (Jun

and Cai, 2001; Pikkarainen et al., 2006), perhaps in the form

of handing out preprepared instruction leaflets.

Perceived risk, social influence ! perceived usefulness (regressionmodel 1)

Our study suggests that customers who have higher levels of

perceive risk about using IBS perceive IBS to be less useful.IBS marketers should attract more young customers by

developing risk-reducing strategies. The ANOVA results used

to test whether young customers perceived equally all of the

three types of risk are affirmative. If the test had found that

young customers perceive one risk type significantly higher

than other risk types, IBS marketers could devise specific

strategies to reduce the particular risk type. However, because

that was not the case, using the specific strategies to reduce

only one particular risk type would be cost ineffective. Thus,

it would be better for IBS marketers to use the appropriate

risk relieving strategies to lower customers’ overall risk

perceptions.

The findings derived from the correlation analysis to

examine the relationship between compliance/identification/internalisation generated by social influence and perceived

usefulness of IBS suggest that social influence negatively

influences young customers’ perceived usefulness of IBS. In

contrast, their willingness to use IBS and their appreciation of

using IBS would yield identification and internalisation that

have a positive effect on their perceived usefulness of IBS.

Young customers perceive using IBS to be useful because

using IBS may serve to maintain an individual’s relationship

with a group in which their self-definition is anchored, or it is

congruent with their value system. They adopt it because they

find it useful for the solution of a problem, or because it is

demanded by their own value. For instance, the internet has

transformed over the last decade from simple HTML statistic

kinds of web pages to very advanced forms (using XML, asp,

php, etc.) of dynamic web interface interactions, which have

attracted mostly the high-technology industry and of course

the younger generation into personal internet use. Typical

examples would include blogs, file share sites, real time

messengers, etc., all of which make up the self-definition and

value system of the young. Training professional information

technologists, who are knowledgeable about these types of

web facilities, about a bank’s financial products and seeking

their assistance in persuading young customers to adopt IBS

is probably a successful strategy for the internet bank.

Similarly, the multiple regression analysis shows that both

perceived risk and social influence constructs exert an

Table VII Correlation coefficients between variables for research model 2

Variables 1 2 3 4 5 6

1. TQ –

2. TQS 0.672 * * –

3. FQUSA NS NS –

4. FQINF NS NS NS –

5. FQINT NS NS NS NS –6. FQS NS NS 0.573 * * 0.578 * * 0.638 * * –

7. LOYALTY NS 0.656 * * NS NS NS 0.577 * *

Notes: NS ¼ not significant; *p , 0.05 (two-tailed); * *p , 0.01 (two-tailed)




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influence on young customers’ perceived usefulness of IBS.

Again, internet bank marketers are advised to concentrate on

strategies that enhance young customers’ perceptions of the

usefulness of IBS; this may be in the form of using computer

animated demonstrations of a large range of sophisticated

transactions IBS can provide.

Perceived ease of use, perceived usefulness ! attitude (regressionmodel 2)

As hypothesised, our results indicate that both perceived ease

of use and perceived usefulness of IBS are significantly

correlated with young customers’ attitude towards IBS use.

One of the most significant findings is the relative strength of

the ease of use-attitude relationship (r ¼ 0:700) and

usefulness-attitude relationship (r ¼ 0:469). Comparing the

contribution of the two predictor variables to young

customers’ attitude, this difference was also significant: the

ease of use-attitude relationship remained large, while the

usefulness-attitude relationship was much smaller. This

contradicts extant TAM research, which suggests that the

effect of perceived usefulness on system usage is more

prominent than that of perceived ease of use. A possible

reason for this may be that young customers value thebenefits of convenience, accessibility and time saved achieved

from using IBS more than other benefits (Waite and

Harrison, 2004). A possible explanation for this is that of

transaction cost implications. For example, the theory of

transaction costs (dating as far back as Coase, 1937) argues

that an entity (firm or person) makes a rational decision

based on giving priority to minimising transaction costs

involved (Ng, 2007). These benefits are consequences of

being able to handle banking needs at home rather than

visiting a branch; access to computing services for the young

age group, especially in a university environment, is better

than that of older groups who do not have as good facilities

or find it more complicated to use computers (hence,

increasing time spent on it, and any opportunity costs,

therefore having higher overall transaction costs). Thus, their

attitude towards using IBS depends primarily on whether

using IBS is time saved and without physical and mental

effort – the ease of IBS use.

The results also show that IBS users have higher levels of

perceived ease of use/perceived usefulness of IBS than non-

IBS users, and this was stronger for the experienced than

inexperienced users. IBS-users employ knowledge

accumulated from past experience to form their attitude;

this knowledge helps to reinforce their attitude towards using

IBS and moderate their future intention and behaviour. IBS

marketers should develop strategies that reinforce specifically

IBS-users’ beliefs about ease of use and usefulness of IBS.

Two strategies for this may be possible:

1 Change the strength of already existing salient beliefsabout ease of use (e.g. emphasising time saving and effort-

free transactions).

2 Reinforcing or changing customers’ attitude to make an

existing favourable belief more salient (linking attributes

of IBS to valued consequences).

Social influence, perceived ease of use, perceived usefulness,attitude ! intention (regression model 3)

Our results show that identification/internalisation generated

by social influence directly affects young customers’

behavioural intention. Hence, young customers are more

likely to use IBS at some point in the future if they want to

maintain a reciprocal-role relationship through meeting the

expectation of their friendship role, or those of their

occupational role. The findings confirm the importance of

social influence as a basis to predict behavioural intention.

B oth EOU and U are significantly correlated w ith

behavioural intention, as hypothesised, as are the

correlation coefficients strong between EOU and U. This

observation contrasts the results on the relationship betweenEOU/U and attitude, which suggests that EOU performs a

more important function in forming positive attitude than U.

Davis’ (1989) study of TAM suggests that ease of use may be

an antecedent of usefulness rather than a parallel, direct

determinant of usage. Our findings suggest that young

customers value ease of use and usefulness of IBS equally.

The regression results suggest that young customers’

behavioural intention is jointly determined by their

perception of ease of use and usefulness of IBS. Again, the

reason for this may be due to transaction cost thinking: the

degree of perceived usefulness is likely to be influenced by

the expected cost (in either real financial terms or a time

expenditure) of carrying out the transaction – this is likely to

be lower for university students who are experienced users of

IBS vis-a-vis the older age group who have yet to fully grasp

or gain access to the technology. While such a finding is

commonsense, it has important implications for IBS

marketers, who may attempt to over-emphasise ease of use

and overlook usefulness in devising their marketing strategies

when both are actually equally important.

The attitude-intention relationship in this study for young

customers correlated 0.472; this is a significant, albeit a weak

correlation. Young customers who have a favourable attitude

towards using IBS are more likely to adopt IBS or continue to

use IBS in the future. According to the theory of reasoned

action (TRA), predicting consumers’ purchase behaviour is a

matter of measuring their intentions to purchase just before

they make a purchase. Unfortunately, predicting the actual

behaviour based on intentions measured too soon before thebehaviour occurs may not be accurate. One strategy for

encouraging the use of IBS may be to provide direct

incentives for doing so, perhaps in the form of free gifts or

additional charge-free services.

The independent sample t-tests indicate that IBS users have

a more positive attitude and intention towards using IBS than

non-IBS users. This implies that once customers have

adopted IBS it would be comparatively easier to retain their

custom. This confirms the benefit of targeting young people

because of their potential as future customers, supporting

Lewis and Bingham’s (1991) view that financial institutions

target young people to “catch them early” in the hope that

they will remain loyal. Once young customers are acquired, it

is important to develop retention marketing strategies as

existing customers. An obvious approach to retain existing

customers is to focus on service quality and satisfaction.

Service quality-customer satisfaction-customer loyalty

relationshipTechnical/functional quality ! technical/functional qualitysatisfaction

Young customers’ perceptions of technical quality of IBS have

a positive impact on their satisfaction judgment of technical

quality; hence, the higher the level of young customers’

perception of technical quality of IBS, the more likely they

will be satisfied with the technical quality of IBS. They seem




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to believe that using IBS is more favourable than other forms

of financial services. The primary reasons given are that

customer accounts are more active and users feel the need to

reconcile more frequently, and they can be assured of a

private, quick and efficient service at any time. IBS should

therefore focus on providing regular transactional details,

such as real time balances. When customers have tried IBS

and value the benefit from it, they are more likely to continueusing it and purchase additional financial services, such as

insurances, provided by an internet bank.

The correlation coefficients on the relationship between

three components of functional quality and respondents’

functional quality satisfaction of IBS indicate that the higher

the level of customers’ perception of the usability/information/

interaction quality of IBS, the higher the level of their

satisfaction with the functional quality of IBS. As the

functional quality of IBS is determined by the web site

quality of the bank, IBS marketers need to pay attention to

the quality of their web site in these three areas (Jun and Cai,

2001). Similarly, the regression analysis on the three

components of functional quality to young customers’

functional quality satisfaction suggests that only interaction

quality of IBS is a satisfactory predictor of satisfaction.Whereas usability and information quality of IBS are

addressed largely through the internal change (the website

features of the internet bank), interaction quality requires a

stronger external perspective. That external perspective is

probably affected by trust, as suggested by Barnes and Vidgen

(2001) who identify it as the strongest differentiator of website

quality, among other things. In turn, trust itself may be

influenced by the bank’s overall image and reputation, the

customers’ previous transactional experience with the bank,

and a whole range of communications generated by the

internet bank.

Technical/functional quality satisfaction ! loyalty

Our results show that both technical and functional quality

satisfactions are significantly correlated with youngcustomers’ loyalty to the internet bank. Young customers

are more likely to be retained as their technical/functional

quality satisfaction increases. The offering of reliable financial

services through the internet should thus reinforce customers’

confidence in using IBS. Similarly, the regression analysis

suggests a relative importance of technical/functional quality

satisfaction of IBS to young customers’ loyalty to the bank.

Although the functional quality dimension might offer an

internet bank a significant opportunity to exceed customer

expectations, what contributes more to young customers’

loyalty is their evaluation of the reliable delivery of the core

service, that is the technical quality satisfaction of IBS. Thus,

internet banks should not neglect the quality of their core

services.

Conclusions

We conclude that there is a significant difference in the

perceptions, attitude and behaviour of young customers (aged

16-29) towards IBS than any other age group in the study. We

therefore argue that there is value in focussing marketing

effort on this segment of the financial services industry,

particularly as they provide the greatest promise of future

profitability. As we find that customers are more likely to be

retained once they use IBS, so similarly marketing effort

should also be asserted to retain existing customers as well as

attract new ones. The research has confirmed prior

expectations about service quality and loyalty, and we

continue to advocate such a need for the continued

development of IBS website quality for the long-term

benefits of the bank and retention of young customers.

We are aware of the obvious limitation of the study of

having only a sample of 164 respondents, of which only 84

were relevant to research framework 1, and of which only 41for research framework 2, and that data collection took place

only w ithin one location over one period of t im e.

Nevertheless, the study still provides valuable insights on

young customers of the IBS context. We suggest further

research in the segment of experienced IBS users, possibly in

the form of a longitudinal qualitative approach (e.g. Chau and

Witcher, 2005) that can track the changing views of

customers as IBS strategies are modified over time. This is

likely to enhance our understanding of customer retention

strategies.

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Appendix 1

Figure A1 Questionnaire




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Figure A1




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Figure A1




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Figure A1




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Appendix 2

Appendix 3

About the authors

Vinh Sum Chau is Lecturer in Strategy and Strategic

Management at the Norwich Business School, University of

East Anglia, and faculty member of the UK ESRC Centre for

Competition Policy. He is also Chair of the British Academy

of Management’s special interest group and conference track

on performance management. He teaches strategic

management at bachelor and masters levels and business

research methods at masters and doctorate levels. His

research interests are in performance management, strategy

implementation, service quality, and customer satisfaction.

Vinh Sum Chau is the corresponding author and can be

contacted at: [email protected]

Liqing W.L.C. Ngai was formerly at the Norwich Business

School, University of East Anglia, where she obtained her

Table AI Development of questions to measure technical/functional quality of IBS

Questions to measure technical quality of financial services Questions to measure technical quality of IBS

1. Fast account/balance information ! 1. The IBS provides fast and accurate account/balance information2. Confidentiality of information ! 2. The confidentiality of information transfer is high

3. Overdraft facility ! 3. Loan application facility of IBS is high4. Cost of services ! 4. Charges of IBS are reasonable5. Interests results ! 5. Interests result provided are good6. Reporting of results ! 6. Reporting of results is good7. Attentiveness to your bank needs ! 7. The bank gives high attentiveness to your internet banking needs8. Ease of handling your banking needs ! 8. It is easy to do what I want to do with IBS (perceived ease of use item 3)9. Ease and frequency of contact b

Source: Lassar et al. (2000)

Table AII Development of questions to measure functional quality of IBS

WebQual 4.0 questions Questions to measure functional quality of IBS

Usability 1. I find the site easy to navigate ! 1. I find the site easy to navigate2. The site has an attractive appearance ! 2. The site has an attractive appearance3. The design is appropriate to the type of site ! 3. The design is appropriate to the type of site4. The site conveys a sense of competency ! 4. The site conveys a sense of competency5. The site creates a positive experience for me ! 5. The site create a positive experience for me6. I find the site easy to learn to operate ! 6. Learning to use IBS is easy for me (perceived ease of use item 1)7. My interaction with the site is clear and understandable ! 7. How to use IBS is clear and understandable (perceived ease of use item 2)8. I find the site easy to use ! 8. The IBS is easy to use (perceived ease of use item 4)

Information 9. Provides accurate information ! 9. Provides accurate information10. Provides believable information ! 10. Provides believable information

11. Provides timely information ! 11. Provides timely information12. Provides relevant information ! 12. Provides relevant information13. Provides easy to understand information ! 13. Provides easy to understand information14. Provides information at the right level of detail ! 14. Provides information at the right level of detail15. Presents the information in an appropriate format ! 15. Presents the information in an appropriate format

Interaction 16. Has a good reputation ! 16. Has a good reputation17. It feels safe to complete transactions ! 17. It feels safe to complete transactions18. My personal information feels secure ! 18. My personal information would/is secure (the reverse of perceived risk item 3)19. Conveys a sense of personalisation ! 19. Conveys a sense of personalisation20. Creates a sense of community ! 20. Creates a sense of community21. Makes it easy to communicate with the organisation ! 21. It is easy to do what I want to do with IBS (perceived ease of use item 3)22. I feel confident that the goods/services will be delivered as promised ! 22. I feel confident that the services will be delivered as promised

Source: Barnes and Vidgen (2001)




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postgraduate qualification. She is now an executive manager

of KellinWell-HK Electronics & Computing, Hong Kong,

which specialises in general computer hardware and internet

software.

Executive summary and implications formanagers and executives

This summary has been provided to allow managers and executives

a rapid appreciation of the content of the article. Those with a

particular interest in the topic covered may then read the article in

toto to take advantage of the more comprehensive description of the

research undertaken and its results to get the full benefit of the

material present.

“You can’t teach an old dog new tricks” is, like many old

adages, not strictly true. You can teach an old dog new tricks,

but maybe it will take a bit more effort and patience. The

same is true for services provided by the internet. No surprise

that younger people take to them like ducks to water, while

older people tend to prefer more traditional methods of doing

business, perhaps because they are set in their ways or a little

bit afraid of taking the plunge into what they might regard ascomplicated and risky tasks.

All of which poses a few problems for service providers who

are anxious to share the benefits of doing business by internet

with an increasing number of customers. Take the banking

industry, for instance. Attracting young customers to use

internet banking services (IBS) is far easer than persuading

older customers to keep up with the times by going online.

The problem for banks is that the younger customers are the

ones with less money. The challenge is for IBS marketers is to

see the longer-term gains by attracting young customers as

“future revenues” which can be generated over time.

Although younger customers’ disposable incomes may be

low, in comparison to older customers, their discretionary

incomes and purchasing power are high.With the growth of the IBS younger customer segment,

marketers must focus on comprehending this target customer

base and deliver consistently to their specific demands. In the

case of university students, for example, the offer of student

and graduate account benefits (e.g. interest-free overdrafts,

credit cards, and discounted loans and mortgages, etc.) is

strongly encouraged. The exact composition of such account

benefits may be the result of further market research into what

exactly graduate students require.

In “The youth market for internet banking services:

perceptions, attitude and behaviour” Vinh Sum Chau and

Liqing W.L.C. Ngai question young, educated people in a

university to explore specifically young (aged 16-29)

customers’ beliefs, attitude and behaviour towards the

adoption of IBS. They conclude that there is a significantdifference in the perceptions, attitude and behaviour of young

customers towards IBS than any other age group in the study

(30-39, 40-49, and 50-plus). They argue, therefore, that there

is value in focusing marketing effort on this segment of the

financial services industry, particularly as they provide the

greatest promise of future profitability. Customers are more

likely to be retained once they use IBS, so similarly marketing

effort should also be asserted to retain existing customers as

well as attract new ones. The research confirms prior

expectations about service quality and loyalty, and advocates

a need for the continued development of IBS website qualityfor the long-term benefits of the bank and retention of young

customers.

That’s not to say older people should be left to their old

ways. Although people aged 30-39 years have a less positive

attitude and intention towards IBS than the younger group,

they have a more positive attitude and intention than the 40-

49 and 50-plus groups.

Self-efficacy (a person’s beliefs in their ability to perform

certain actions) plays an important role in shaping individual’s

feelings about using IBS. Hence marketers should focus their

strategies on enhancing young customers’ self-efficacy of

using IBS. As for the potential customers who might not have

a high level of self-efficacy of using IBS, marketers can

enhance customers’ confidence, perhaps in the form of handing out pre-prepared instruction leaflets.

The study suggests that customers who have higher levels of

perceive risk about using IBS perceive IBS to be less useful.

Marketers should, therefore, develop strategies to lower

customers’ overall risk perceptions.

Young customers perceive using IBS to be useful because its

use may serve to maintain an individual’s relationship with a

group in which their self-definition is anchored. The internet

has transformed over the last decade to embrace advanced

and dynamic web interface interactions, which have attracted

mostly the high-technology industry and of course the

younger generation into personal internet use. Typical

examples would include blogs, file share sites, etc., which

play a part in the self-definition and value system of the

young.

Training professional information technologists, who are

knowledgeable about these types of web facilities, about a

bank’s financial products and seeking their assistance in

persuading young customers to adopt IBS is probably a

successful strategy for the internet bank.

Both perceived ease of use and perceived usefulness of IBS

are significantly correlated with young customers’ attitude

towards IBS use. The results also show that IBS users have

higher levels of perceived ease of use/perceived usefulness of

IBS than non-IBS users, and this was stronger for the

experienced than inexperienced users. IBS marketers should

develop strategies that reinforce specifically IBS users’ beliefs

about ease of use and usefulness of IBS.

(A precis of the article “The youth market for internet banking

services: perceptions, attitude and behaviour”. Supplied by

Marketing Consultants for Emerald.)

To purchase reprints of this article please e-mail: [email protected]

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