IB Adoption in Sri Lanka: Analysis of Demographic Variables of Banking Customers

Abstract

Contemporary concepts of information and communication technology and implementation strategies to banking services have become a significant matter to all banks in Sri Lanka. The advancement in technology has played an important role in improving service delivery standards in the banking industry. At present, Sri Lanka has a liberalized telecommunications market that has huge impacts on the economic and social development of the country. The Sri Lankan government has initiated several projects, emphasizing the need in rural areas and to provide unrestricted sources of information to all its citizens. When compared with the development of information and communication technology in the country, the demand for Internet Banking facilities is not at a significant level. Therefore, the main objective of this research study was to analyse the demographic factors of IB users and IB non-users in Sri Lanka. This study incorporates both primary and secondary data. Primary data were collected by utilizing semi-structured interviews and a customer survey of the selected banks in Sri Lanka: private bank (Sampath Bank), government bank (Bank of Ceylon) and a foreign bank in Sri Lanka (HSBC). The questionnaire was mailed and handed over to the customers of each bank along with a postage-paid return envelope and a cover letter explaining the purpose of the study. A total of 253 questionnaires were received resulting in a response rate of about forty two percent. However, only 240 questionnaires were useable as in the remaining questionnaires, substantial portions were not filled in. Therefore, the samples include 120 IB users and 120 IB non-users. The convenience sampling method was employed to select the sample of IB and IB non-customers for this study. Analyses of the ungrouped binary data were based on a binary Logistic Model and Statistical Measurements: Central Tendency, Dispersion and Skewness. Data were analyzed using Eviews version 5 application to strengthen the accuracy of results. McFadden R2 (R2McF), P, and Likelihood Ratio (LR) Statistic tests were utilized for testing the goodness of fit, statistical significance of the parameters and for testing the overall significance of the model. In addition, the Jarque-Bera (JB) test was used for testing Normality. The findings of this study have important implications for researchers in the field of IB, banks that are currently offering IB services as well as banks that are planning to offer such services. The outcomes of this research can be applied to developing countries in the region in general.