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Web-based applications contribute significantly towards customer retention through their wide reach and possibility of enabling attractive offers of new services and products to them (Tan & Teo, 2000). Web-based applications are extensively utilized in all fields of industry today. Its insurgence into banking has practically revolutionized the financial field because Internet Banking enables fast and immediate financial transactions, thus saving human time and effort (Zolait, 2010). Hence, there have been a fundamental shift in banking delivery channels since mid-1990s (Pikkarainen, Pikkarainen, Karjaluoto, and Pahnila 2004) and many banking executives now perceive technology to be a key factor in controlling costs (C.-P. Lee, Mattila, & Shim, 2007). Internet Banking improves profit levels of the bank through reduction of costs, enhanced competitive advantages, reach of global customers and possibility of an instant communication and feedback channel (Harridge-March, Wong, Rexha, & Phau, 2008; Jazani, Sobhanifard, & Kharazian, 2012; Nathan, 2014). The customer’s waiting time is also reduced in Internet Banking, and their satisfaction is enhanced. This results in improved service performance (Harridge-March et al., 2008). It is therefore not surprising that Internet Banking has become the most favored trend in banking, and has emerged as an important route to payments, a feature essential for e-commerce models (Zolait, 2010).
Some of the benefits of Internet Banking to customers as identified by Angelakopoulos and Mihiotis (2011) include absence of time constraints and geographical limits, cost cutting, 24/7 customer support, possibility of easy access for disabled people and integrated environment for Internet Banking transactions. In recent years, many banks have adopted Internet Banking as an additional channel to reach and interact with customers (Alhinai, Albadi, Alshihi, & Al-Gharbi, 2013). Within financial institutions, Internet Banking or Electronic Banking is recognized as a tool that can cut day-to-day expenses (Alhinai et al., 2013).
Despite the fact that Internet Banking provides advantages such as lower handling fees and faster transactions, it is indeed true that many consumers are reluctant to adopt Internet Banking, and so the reach of this form of banking has not been as wide as expected. Gerrard, Barton Cunningham, and Devlin (2006) examined this slow growth using content analysis procedure, and identified eight causes, viz. need, absence of knowledge inaccessibility inertia, lack of human touch, perceptions of greater risk, pricing and IT fatigue. Following the suggestions of Laukkanen (2007), that a customer-centric approach be adopted for designing and developing successful and effective distribution channels.
Studies in Internet Banking concentrate on the factors that lead to the adoption of IB rather than its success. Williams, Dwivedi, Lal, and Schwarz (2009) showed that a wide diversity of theories and theoretical constructs exists in literature, but researchers extensively use just one theory: ‘TAM’, and its constructs ‘perceived usefulness’ and ‘perceived ease of use’. Some such theories include Decomposed Theory of Planned Behavior-DTPB (Taylor & Todd, 1995), TAM2 (Venkatesh & Davis, 2000), Unified Theory of Acceptance and Use of Technology-UTAUT (Venkatesh, Morris, Davis, & Davis, 2003). Other studies use Diffusions of Innovations (DOI) (Rogers Everett, 1995) theory to explain how an idea or product gains momentum and diffuses (or spreads) through a specific population or social system.