Understanding the E-Banking Channel Selection Behavior of Elderly Customers: A Small-World Network Perspective

Understanding the E-Banking Channel Selection Behavior of Elderly Customers: A Small-World Network Perspective

Xiaolei Cui (Harbin Engineering University, China) and Jianzhong Xu (Harbin Engineering University, China)
Copyright: © 2022 |Pages: 21
DOI: 10.4018/JOEUC.300765
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Abstract

To reveal the influence mechanism of e-banking channel selection of elderly customers, according to the analysis of elderly customers’decision-making process, a threshold model is proposed by using small world customer relationship network and variable setting in this study. The multi-agent simulation of e-banking channel selection behavior of elderly customers is carried out from the perspectives of channel diffusion speed and customer channel selection proportion in the context of Covid-19 pandemic. The research shows that channel performance and individual differences of customers affect the adoption of e-banking by elderly customers. This study also has found that network size and network density can regulate the impact of channel performance on the selection behavior of elderly groups. However, they could play a regulatory role under certain conditions. Finally, this study puts forward some suggestions to improve the channel diffusion efficiency, such as building an elderly friendly e-financial service channel and construction of elderly business market culture.
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1. Introduction

During the Covid-19 pandemic, measures such as social isolating and national quarantines led to restrictions on the movement of people. These restrictions influence the operation of many sections, such as tourism, banking and finance (Gerwe, 2021; Borri & Giorhio, 2021). To mitigate the spread of the Covid-19 virus, closed physical contact is discouraging in service-oriented businesses. For example, in the banking industry, face-to-face customer services came to a near-standstill in developing economies due to human movement restrictions (Chirisa et al., 2020). In addition, people are more vulnerable to infection when they encounter a face-to-face service, since the means of spreading the virus is mainly human-to-human contact. Therefore, many customers are reluctant to go to banks offline to prevent being infected. As a remedy, banking must provide digitally enabled services or platforms.

In developed countries, a dramatic development in financial technologies is changing the way people shop, save, borrow, and make financial decisions (Economides & Jeziorski, 2017). Meanwhile, the information technology revolution has created extraordinary new opportunities for the banking industry in developing countries to address challenging issues concerning operational efficiency, marketing channels, and the technological environment (Kaur & Ali, 2021). Increasing numbers of people use financial technology in China, where the new technologies have been widely used in financial services or financial products marketing, such as Internet banking, telephone banking, mobile banking. We collectively refer to these digitally enabled services as e-banking (electronic banking). Especially during the Covid-19 pandemic, people are more dependent on e-banking channels than before since they are more worried about their health. Banks’ increasingly rich service channels have provided more choices for customers to obtain financial services, and changed the Chinese banking industry’s traditional operation models and marketing concepts. Under the new financial ecology, deep integration of information technology, active integration of financial science and technology, digital transformation and innovative development are essential ways for the sustainable development of Chinese commercial banks.

Currently, the conception of e-bank has been recognized and accepted by more and more young user groups. However, China is experiencing the fastest aging process. According to CSY report, elderly people aged 65 and above have increased from 62.99 million in 1990 to 88.11 million in 2000. In 2021, it has reached 190.64 million, accounting for 13.50% of the total population. It is estimated that by 2040, the proportion of the population aged 65 and above will exceed 20%(CSY,2021). Financial activities of the senior citizen, referring to as the elderly customers in this study, have been ignored by existing literature. Since the elderly are unfamiliar with online banking and have limited ability to learn new things, they are not willing to accept and even refuse e-banking. As a result, they are more inclined to go to outlets to handle financial business and encounter a face-to-face financial service. However, bank financial services have an essential impact on the life of the elderly (Oinas-Kukkonen, 2010; Guido et al., 2020). E-banking services are essential for all people; moreover, they play an increasingly important role in the elderly(Msweli & Mawela, 2020). Therefore, it is necessary to explore how to attract the elderly to engage with e-banking services.

Unquestionably, problems such as the ‘digital divide’ and ‘intelligence barrier’ have created obstacles in the daily lives of the elderly. These problems are attracting attention from scholars and practitioners. Against this background, this paper investigates how to provide targeted and diversified banking services for the elderly based on information technology. It is of significance for the sustainable development of banking and for society to encourage the elderly to adopt disruptive technology and adapt to the rapid development.

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