byStudent’s Name




Code+Course Name




Duringthe process of carrying out the study, I was at the mercy ofdifferent people who made this research a success. I would like tothank my instructor for taking me through the processes of conductingresearch. In addition, I would also thank my colleagues for theirpart in the constant consultation with one another and finally, myfamily for their incessant support and encouragement during thestudy.


Telephoneand Internet banking are representations of advanced technology inthe banking industry. Most banks have adopted internet bankingbecause of the fast-paced technology. In order to heightencompetitive advantage, most banks have resorted to internet bankingto cope with the changing demands of the customers. The study is aqualitative and explorative. It used postal questionnaires, whichwere sent to 324 customers and 43 senior bank managers of selectedbanks. The results showed that the banking industry believes that inorder to increase competitive advantage, technology is the key andshould be embraced. 81% of the respondents said banks gaincompetitive advantage when they use internet banking. On the otherhand,17% said they preferred traditional banking methods, whereas 2%said they did not know whether it has enhanced competitive advantage.The findings show that theyagree with the previous literature.

KeyWords:Internet, Internet banking, competitive advantage, customers, bankingindustry, technology, e-commerce.



1.0 Introduction 5

1.1 Research Questions 7

1.2 Problem Statement 7


2.0 Literature Review 9

2.1 Factors that Enhance Adoption of e-Banking 10

2.1.1 Accessibility 10

2.1.2 Convenience 10

2.1.3 Privacy 11

2.1.4 Security 11

2.1.5 Design 12

2.1.6 Speed 12


3.0 Methodology 30

3.1 Research Design 30

3.2 Data Collection 31


4.0 Results 33


5.0 Discussion 37

5.1 Education and Internet Banking 37

8.2 Table 3: Variables on Internet Banking 38

5.2 Customer Satisfaction 39

5.2 Conformity 40


6.0 Conclusion 44

6.1 Recommendation 45

6.2 Future Work 45

7.0 References List 46

Appendices 55


Bankingindustry has experienced growth in the past decades thanks to theemergence of technology.Technology has played an important role inenhancing the development in the banking industry. The pertinent roleplayed by technology has been demonstrated in the past, particularlythrough banking. Not only has it accelerated improved efficiency andoperations, but it has also acted as a determining factor in shapingthe banking sector (Jayawardhena, &amp Foley, 2000, p. 19). The useof information technology, which widely refers to computers,telephones and other peripheral devices, has injected tremendousdevelopment in service industries recently. It is no-brainer that thebanking industry has been the greatest beneficiary. Introduction ofIT-oriented products on the internet banking, information exchanges,security investments, and electronic payments (Ahmad &amp Al-Zu’bi,2011, p. 50). Banks can now offer more diverse services to clientswith fewer workforces. Based on the growth patterns, it is quiteclear that IT can elicit equivalent enhancement profits. There is ahost of advantages that come along with telephone and internetbanking. For instance, the clients can make enquiries on their bankaccount balances without necessarily going to the banking halls.Online banking has enhanced real-time transactions by the clientsLichtenstein &amp Williamson, 2006, p. 50).

InformationTechnology has rapidly compelled by the advances in technology. Notonly since the back-offices automation and the use of legacy systemsfor the data and banking transactions have IT become a cardinaldeterminant in the banking industry (Sangeetha, 2012). What is more,in retail banking the clients have had intimate contact to theinformation systems infrastructure of the bank, since the inventionof the automatic teller machine (ATM). The present hype concerningdirect banks, mobile banking, direct brokerage or mere internetbanking indicates that the importance IT in the dissemination offinancial services, has seen a rapid increase (Ibrahim, Joseph &ampIbeh,2006, p. 475). This has been true for the direct brokers that dependson and utilizes the transactions of securities being executed. Thereliance on internet distribution channels enhances suggestions thatthey are capable of gaining some level of competitive advantagethrough leveraging innovative distribution technologies. Apparentlythe success in banking is attributed to the ability of a bank toengage on internet banking (Poon, 2007, p. 59). However, IT in thebanking industry is seen as a strategic necessity as opposed to asource of competitive advantage. The view on the necessity rests onthe premise that the used technologies are commodities that can beeasily found on the factors of the market (Thulani, Tofara&ampLangton, 2009). United Kingdom is one such nation that has massivelyrelied on telephone and internet banking in order to realize the bestperformance and serve the clients best. In order to explore thesignificance of the telephone and internet and as a source ofcompetitive advantage in the banking industry, this paper sheds morelight with more emphasis on the situation in the UK (Sayar&ampWolfe, 2007, p. 122).

Apparently,computer technology in the UK banking was limited only to the backoffice – it was deemed a class of applications that were onlysuited to accelerating existing tasks and offered labor cost-savings.The equipment was extremely costly and was further fuelled by theperception that this technology could only be economically viable incentralized huge processing activities (Sayar&amp Wolfe, 2007, p.122). Nevertheless, two important developments advanced the role ofinformation technology in the banking industry. Initially, the newlyintroduced hardware known as the specialized programming skillsinjected a shift toward development of in-house solutions to banksand expertise that coupled them. The trend, alongside the lack ofuniversal languages for programming in the early computer yearsimposed considerable costs on implementation of banks in training andrecruitment. While skills reusability was relatively low throughoutvaried hardware platforms (Ibeh, Luo&ampDinnie, 2005, p. 355).

Inaddition, the local-only feature of early computer technologiesplayed an integral role in upgrading the strategic role of a singlebranch compelled by technical capability. The UK banking technologyis as old as the history of computers. Stemming from the oldaccounting machines to the current customer relationship management(CRM) systems (Lewis &ampSoureli, 2006, p. 15). The evolution in theUK banking technology occurred around a host of events that mirroredprevailing socio-economic or political conditions. Under suchconditions, in certain cases, there are many bottlenecks that havehindered the development. Banks have at times, increasingly mobilizedtechnological inventions to cope with the regulatory or othergovernment interventions by the government for the purposes ofmaintaining the interests of their business (Wu &amp Wu, 2010, p.723).

1.1Research Questions

  1. Can the banking industry remain competitive by using traditional modes of banking in a technologically driven world?

  2. Will consumer behavior have an influence on their willingness to adopt certain types of innovation?

  3. What strategic decisions can banks adopt to strengthen their positions in a highly competitive and technology driven market?

1.2Problem Statement

Technologyhas pushed every other industry to the point where lack of it meansthat the industry will lag behind in the competitive marketplace.Most banks have made banking closer to the people through technology.Thus, the satisfaction levels have increased among clients becausebanking has been personalized. Banks that have been reluctant inadopting technology have lagged behind in the marketplace. Thecurrent world is such that people do not have time for lining up inthe banking halls. The current society also prefers personalizedbanking service. Thus, they are often happy to give their bank a callor conduct online banking without having the stresses of going downthe banking hall. Every individual wants to save time on thedifferent commitments they have. For that reason, they embrace theuse of technology as a faster way of conducting their bankingwherever they are and at any time. The absorption of online businesshas also prompted the increasing dependence on the technology in thebanking industry. For instance, the current society has embracedonline shopping, online marketing, online meeting, and many more.Therefore, online banking has also come into the fore since peoplewalk wherever with their credit cards in the insecure times, and agewhere carrying cash is unsafe. With the credit cards, customers canwithdraw money, and spend it all the time without having to contacttheir respective banks.

Insummary, the introduction presents the background on internet bankingand how it has helped growth of banking in terms of competitiveadvantage. In addition, the introduction highlights the researchquestions and problem statement. Research question guides the flow ofthe study, whereas the problem statement presents the gravity of theproblem and why the study is necessary.

CHAPTERTWO2.0Literature Review

Theconcept of internet banking has attracted different definitions. Forinstance, internet banking is defined as the issuarance of servicesand information by the banks to the clients through varied platformsof delivery that are usable with different terminal gadgets includingpersonal computer as well as a mobile phone coupled with software,digital television or telephone (Yang, Jun, &amp Peterson, 2004, p.1149). Other than cash withdrawals, online banking offers customersaccess to virtually any banking transaction by just clicking on themouse. As a matter of fact, using the internet as an option fordistributing financial services has developed into a competitiverequirement instead of merely a way of realizing competitiveadvantage with the coming of globalization and even more fiercecompetition (Yang &amp Fang, 2004, p. 302). Most banks utilizeinternet banking as because it is one of the easiest and cheapestchannels of delivering banking services. The services save money andthe amount of time with the possibility of completely erasing ordramatically reducing the errors. In addition, online bankingservices enhance banks to institute and expand their relationshipwith its customers (Consoli, 2005, p. 461). Banks also have numerousadvantages associated with online banking including masscustomization to befit each user’s like, invention of new servicesand products, lower communication costs and effective marketing. Manybanks are also adopting the ATMs as a means of reducing the cost ofopening a new branch in a new place. It is because the customers havemore preference for ATMs in transacting their businesses. Onlinebanking is a lower-cost channel of delivering financial services andalso a means of increasing sales. Online banking services have becomeamong the most significant factors in the present business economy(Heart, Pliskin&amp Curley, 2007, p. 176).

2.1Factors that Enhance Adoption of e-Banking

Thereare a number of factors that have enhanced the increased adoption ofthe internet banking.


Accessibilityis the ability of the service users to access information from theinternet is dependent on numerous factors. They include the contentformat, the abilities and disabilities of the user, settings andsoftware, internet connection, the user’s hardware andenvironmental conditions (Qureshi, Zafar &amp Khan, 2008, p. 1). Atext that is equivalent to an image on a web page is enough to giveinformation that may be required by the clients. Approaches andtechniques that enhance web pages that are more accessible forindividuals with disabilities also buttonhole many other issues ofaccess including speed of download and discoverability. Other studiesintimate that prompt responses, ease of use and attentiveness, hadsignificant effects on both customers’ perceived satisfaction andoverall service quality (Polasik&amp Wisniewski, 2009, p. 32).


Internetbanking offers a higher level of convenience that enables customersto get access to the internet bank wherever and whenever they want.Other than that, easy access to computers is viewed as a measure ofcompetitive advantage. There are certain determinants of servicequality that are preponderantly satisfiers and others that arepreponderantly dissatisfiers with the key satisfaction sources beingthe responsiveness, attentiveness, friendliness and care. The factthere is customer interactivity is an integral criterion that enticesthe users in the delivery of internet banking. This has been a highlyregarded aspect in the UK banks because the users always wantsomething they can always rely on (Kassim&amp Abdulla, 2006, p.424).


Customersoften have doubts concerning the trust of the privacy policiespresented by the internet banks. Trust seems to have an outstandinginfluence on the willingness of the user to engage in online moneyexchanges and sensitive information. Privacy is one of the mostimportant elements that may impact on the intention of the users toadopt online-based transaction systems (Yang &amp Jun, 2002, p. 19).Encryption technology remains one of the most common characteristicsat all sites on banking to secure information privacy, appended by aconglomeration of different unique identifiers (Herington &ampWeaven,2009, p. 1220). For example, a memorable date, password, or pinnumber. The more private the system, the easier it will be for theclients to adopt online banking. Customers would want to be part of asystem that ensures their privacy in terms of account details, aswell as that of financial transactions (Herington &ampWeaven, 2009,p. 1220).


Whena web site has offered assurances on the safety of the information onthe customers’ personal and financial transactions, they are likelyto adopt online banking. Security of the banking on the internet canbe assured through provision of privacy statement on the security ofthe clients’ shopping mechanisms. It is also through displaying thelogos of the trustworthy third parties (Herington &ampWeaven, 2009,p. 1220). For instance, displaying the logo of the trusted thirdparty warrants some degree of security protection and has beenindicated to have a significant influence on how the customers regardthe vendors’ trustworthiness (Herington &ampWeaven, 2009, p.1220). Online banking was enabled through the creation of webbrowsers. In this model of internet banking, customers do not have tobuy extra software, backup data, store any data on their personalcomputers, or wait for upgrading of software (Herington &ampWeaven,2009, p. 1220). All the transactions often take place on a safeserver of the bank through the internet. The bank should havesoftware and data to carry out their transactions. Customers often goto the web site of the banks to log in, and continue enjoying theservices (Herington &ampWeaven, 2009, p. 1220). Security often playsan integral role in online banking and, as a result, there are anumber of protocols for security of the internet. Customers areunaware of the encryption. Nevertheless, only some versions ofwell-known internet browsers are acceptable to certain banks becauseof their restricted security (Harrison &amp Waite, 2005, p. 187).


Thegoal of the aesthetic design on the banks’ websites is visuallyenjoyable and attractive. How the knowledge is elicited, how theinformation is structured and organized, retrieval of information andpresentation of the information are some of the aspects identifiedwhen developing content (Baraghani, 2008). In the process ofdesigning and before implementation, it is often strongly proposedthat users of varied ages and with a raft of limitations andcapabilities be engaged in testing the new service and offerfeedback. Financial institutions need to try the accessibility oftheir client websites, both with the automated tools and trials onthe accessibility of the users. Thus, it is theorized that designtends to have a positive impact on the satisfaction of the customer(Shah &amp Siddiqui, 2006, p. 442).


Thereis a correlation between the speed of download and user satisfaction.The download speed depends on the nature of the content of thedownloaded site, the connection method and computing hardware used indownloading information. A good number of sites show a snapshot andcertain users have to download a given program with a view to seeingthe demonstration (Zhao et al., 2008, p. 505). More often than not,slowed response time after any internet interaction results in delayof service delivery and also makes the clients unsure on whether ornot their financial transaction has been completed. The banks striveto ensure that their internet speed is superb so that they can takethe shortest time possible when transacting businesses online. Thementioned elements are imperative in determining the rate at whichcustomers can uptake online banking. Online banking is impacted uponby the factors that encourage the customers to be part of the bankingsystem (Brodie et al., 2007, p. 2).

Thereis a raft of studies regarding the use of technology in banking andother financial activities. Apparently, banking is reliant on anumber of activities such online shopping and insurance activities.The digital age has swallowed the paths that have been taken by theglobal economy (Khalfan, Al-Refaei&amp Al-Hajery, 2006, p. 155).Business has opted for the use of the Internet in their dealings.Other than just the conventional emailing, companies have gone fulltime into sales, advertisements and communication with the clientsdirectly. Professional with higher knowledge of Internet applicationstends to have the upper hand in the job market (Yaya,Marimon&ampCasadesus, 2011, p. 1194). One such example of companies’use of the Internet through cloud computing. Most organizationsusethis software for purposes of setting up meetings through thewebsite. Businesses from varied locations can meet online throughcloud computing. For that reason, costs related to hotel reservationsand airfares are considerably cut (Yaya, Marimon&ampCasadesus, 2011,p. 1194).

Therehave been marketing and sales revolution there has been a constantchange and people just have to adapt to the regular changes as theycome. Sales and marketing arena has been transformed by the Internetbecause companies just provide information to customers or theirpotential customers for free, and that becomes a plus in sales andmarketing. The customers are only given the information they want,and they make their choices (Christopher et al., 2006, p. 360).Technology has also fastened business thanks to the Internet. It haschanged the way people do businesses – emails have phased outfaxes, memos and telephone calls. Smart phones have been able toconnect a business’ entire network when an individual is out ofoffice. Responsiveness to communications has been faster than ever.Companies have hatched new method of using where it directlycommunicates with customers and getting instant feedback. Somecompanies have incorporated the clients as part of their decisionmaking or presenting their views on the company’s situation (Burke&ampSewake, 2008).

Inother words, the Internet has enabled e-commerce where services aresold and paid for online with very little interactions. Marketbarriers eliciting from geographical location and others haveflattened the marketplace. The essence is, sellers and buyers fromthroughout the world can do business and connect(Papasolomou&ampVrontis, 2006, p. 177). The advantage is that theobstacles that had hindered smoothened business transactions beforehave been flattened. In addition, the Internet has increasedinnovation, this is possible because once organization managersrealize that something is going wrong, they can hatch new methodsthat would solve the problem. What is more, the continued advancementof technology leads to drop in prices of goods and services(Lyytinen&amp Rose, 2003, p. 557).

TheInternet infrastructure has become the significant driver of theglobal economy. Virtually every business in the developed nations hasestablished their online identity. Other than making the customersknowledgeable, Internet has also permitted businesses to reach newpotential customers (Lyytinen&amp Rose, 2003, p. 557). By 2010, theannual economic benefit accrued from Internet globally hit $1.5trillion (USD). It can be linked to the fact that there are onlinebuying and selling. Apparently, the Internet has increased businessgrowth because most organizations have made their systems. It hasbeen to the extent that the conventional bureaucracy thatcharacterized businesses has been replaced by the systematic databasewhich gives the required information within the shortest possibletime. It is indeed true that the Internet has made the world a globalvillage due to the reliability of and the speed with whichinformation is transferred. On the business front, money istransferred through the Internet through credit cards or e-banking(Zeithaml, Parasuraman&amp Malhotra, 2000).

Onlinetrading is a technological aspect that offers a great boost ineconomic growth worldwide. It has varied reasons as to whether onlinetrading enhances or reduces customer satisfaction. In the businessworld today, electronic commerce is one of the hottest topics ofdiscussion (Papaioannou et al., 2013, p. 2). The buying and sellingof services, products, and information, through computer networks –primarily the Internet is known as electronic commerce. It helps instreamlining business procedures, re-shaping supplier and customerrelationship, and restructuring general industries (Papaioannou etal., 2013, p. 2). In order to conduct one or more business functions,e-commerce systems based on the internet use World Wide Web pegged onapplication solutions. As a matter of fact, e-commerce is a means ofconducting, running, and managing business transactions through theuse of Internet and computer (Papaioannou et al., 2013 p. 2).

Onthe basis of the considerable power of WWW and the international–commerce, the numbers of the users of the internet has beenquickly increasing and have widely spread into all life’s aspects(Novak, Hoffmann, &amp Yung, 2000, p. 22). Online trading hasmanaged to open numerous business opportunities for the users. Themost commonplace e-commerce use the replacement or enlighteningtraditional methods of transaction and in the last several years, aconsiderable growth of internet-oriented services being seen(Papaioannou et al., 2013, p. 2). Online shopping is one of thesub-sets of e-commerce because it predominantly meansbusiness-to-customer transactions including online auctions andonline retail. Online shopping also means online purchases fromonline retailing corporations and brick-and-mortar retailers such asRakuten or (Papaioannou et al., 2).

Onlineshopping has increasingly become popular in the last decade. Forinstance, in 2012, the amount of e-commerce sales in the UnitedStates totaled to $289 billion from the previous $256 billion in2011. More than 33% of United States e-commerce revenue was realizedthrough flight and travel booking websites in 2012 alone (Park, Amit&ampRaghav, 2010, p. 13). The biggest share of online revenue wasrealized by shopping websites which earned $186 billion in 2012. Theprojection of the amount of revenue that will be realized by 2016will earn about $361 billion (Park, Amit &ampRaghav, 2010, p. 13).On a similar note, the number of digital shoppers in the UnitedStates is expected to grow from 2010’s 137 million to 175 millionin 2016. The essence is that online trading has increased and isprojected to increase in a number in the coming years (Park, Amit&ampRaghav, 2010, p. 13).

Onlineshopping has been assuming an increasing trend in the current worldwith an increase in the intensity and reliability of the globalinternetworking. (Novak, Hoffmann, &ampYung, 2000, p. 22) notesthat the World Wide Web is experiencing an increasing number of usersranging from the young generation to older persons. As many peopleget connected to the internet, they realize more opportunities andthe advantages of doing their shopping online Laukkanen, Sinkkonen,&ampLaukkanen, 2008, p. 440). The advantages have overwhelmed thedemerits, and many people get attracted to the online business.Besides, the internet has presented producers with a wide range ofcustomer to whom they can market their products at a lower cost(Sanchez-Franco, Manuel &amp Francisco, 2010, p. 171). With theincrease in the global number of internet users in the recent past,the global internet business increased by a big margin in2011recording an increase of about 20% in Europe and America(Papaioannou et al., 2013, p. 2). This is due to an increase in thenumber of potential customers who are able to meet trustworthysellers. As the online business booms across the globe, a number ofpeople are beginning to trust the exchange system presented on theinternet and hence more sites are constantly emerging as the mostreliable and convenient sites for certain goods (Sanchez-Franco,Manuel &amp Francisco, 2010, p. 171). For instance, the use ofPayPal, money booking options and e- banking capacities has increasedtremendously among the techno savvy. More people opt for an online orhome purchase as opposed to the over the counter option due to itsconvenience and reliability (Sanchez-Franco, Manuel &amp Francisco,2010, p. 171).

Accordingto Migdadi (2008), adoption of internet banking has dramatically beenincreased in the last few years in the UK. This has been in responseto the changing needs of the customers as well as deregulationpractices that exist in the UK in the past three decades. Banks inthe UK have mainly focused on offering a better service quality totheir clients to retain them for the longest time. Banks that haveadopted internet or telephone banking have significantly improvedtheir service delivery and also increased the customer base. Thequality of internet banking is attributed to the electronic bankingand viewed by the customer, the service provider and other parties.

Anotherexample of the success of e-banking is through the issuance of creditcards, which are used to make purchases in stores and online. Creditcards can also be used for advance withdrawals and balance transfersfrom ATMs. Credit cards are international reorganized and can be usedin millions of places worldwide. They can also be used in allinternational languages (Johnson, 2005, p. 473). Generally, a creditcard is an agreement between the card holder and the credit cardprovide (lender) to lend the card holder to make purchases. Creditcard holders are charged interest for the money given to them bytheir credit card provider. Credit card holders are limited to theamount of credit that they can receive within a specific period. Thecredit limit on credit cards is the amount of money that the cardholder can spend through their credit card (Johnson, 2005, p. 473).

Sincethe inception of internet banking and e-commerce, many people haveturned to credit cards as their most preferred means of payment.Included here are some of the merits of credit cards as an excellente-banking example. Credit cards provide card holders with the abilityof making purchases and paying for them later (Montgomerie, 2006, p.301). This aspect of credit cards is particularly important foronline purchases where cash payment is not applicable. Besides, itprovides protection to consumers who get faulty merchandise fromonline purchases. The delay in payment gives the consumer enough timeto make claims for faulty merchandise or delayed delivery. Delay inpayment also gives the card holders to preserve their cash and usethem to pay for other needs (Montgomerie, 2006, p. 301).

Creditcards are convenient and make it easier to make purchases. Today,many businesses do not accept cash payments and only prefer otherforms of payments, such as credit cards. Besides, credit card holdersdo not need to carry large amounts of money with them or have toworry about exchanging their cash into other currencies (Borzekowski,Elizabeth &ampShaista, 2008, p. 149). With a credit card, anindividual is able to conduct business in any location on the globewithout the worry about the barriers of communication or exchange ofcurrency. The use of credit cards to make purchases providesguarantee and protection for purchases made. If the merchandise getslost, stolen or damaged, the card holder and or a credit card makeclaims for refund (Borzekowski, Elizabeth &ampShaista, 2008, p.149). Besides, even if the original purchase receipt is lost, creditcard statements can be used as evidence for payments made.Additionally, credit card holders who make large purchases canbenefit from insurance offered by their credit card provides on largepurchases (Borzekowski, Elizabeth &ampShaista, 2008, p. 149).

Acredit card provides the holders with the opportunity of building acredit reputation. A good credit history is financially important notonly for acquiring credit cards, but also for other financial needssuch as rental applications, loans, and some jobs. Holding a creditcard and making prompt payments helps in building a good creditreputation (Montgomerie, 2006, p. 301). Credit cards are good inemergency financial situations. While card holders are advised not tospend outside their budgets, sometime emergencies do occur thatrequire financial intervention. For example, if somebody is involvedin an accident and required immediate medical care, the easiest andquickest option of accessing money will be through the use of acredit card (Montgomerie, 2006, p. 301).

Mobilephone technology has enhanced trade and development throughout theworld. Individuals do not have a physical presence to concludebusiness deals. Following the furtherance in the levels of onlinetechnologies, it has been possible for e-commerce to prosper throughmobile phones. Given this fact, it has become apparent to owners ofbusinesses and entrepreneurs that the mobile phone is an enormoussystem of communication where they can grow and advance theirbusinesses (Loonam&ampO`Loughlin, 2008, p. 164). They can alsoattract more clients and heighten efficiency of their businesses.Shopping online is no longer restricted to a few people but hasbecome the norm. Not only is online shopping fast, but it is alsoconvenient (Yang, 2005, p. 257). Therefore, the emergence of mobileprovided a significant foundation for the development of e-commerceand for business owners to exploit new opportunities for theirbusinesses. Today, it is almost suicidal for a business to ignore theimportance of claiming their share of the web. One important merit ofe-commerce is that users are in a position to access them at anyplace and make their orders and purchases at any time of the day(Han, 2008, p. 47). Mobile phones make it even better becauseindividuals can track their transactions and get feedbacks at anytime of the day. The E-commerce websites have also worked onenhancing the experience of the customers, with the aid of rapidhelp, easier reach to the larger stores, getting the products andmaking specification comparisons, among other benefits. This meansthat businesses can analyze the trends of their customers and makeamends should the need arise (Celik, 2008, p. 353).

Similarly,mobile phones, have allowed businesses to conduct securetransactions. Through online banking, for example, bankinginstitutions provide their customers with the opportunity to registerand enjoy banking opportunities over the internet. This meanscustomers do not have to visit the banks to complete theirtransactions (Chong et al., 2010, p. 267). Through these services,customers can order for checkbooks, pay their bills and transferfunds. All these can be achieved through shot messages and emails.Development social communication technology has allowed banks toimprove efficiency using modern software (Durkin, 2007, p. 219).Subsequently, there has been a general reduction in the cost ofconducting business for organizations and cheaper costs of goods andservices for consumers. Increased usage of mobile phones has alsoresulted into the development of various modes of payment that hasfacilitated consumers to make easy and convenient purchases (Wan,Luk&amp Chow, 2005, p. 255).

Theelectronic provision of banking services has grown to become anintegral for virtually all banks in order meet the expectations ofthe customers. It also aids in building a strong customerrelationships. As a result, it is doubtless that internet banking hasthe possibility of overwhelming conventional banking in the comingperiod (Al-Hawari, Hartley &amp Ward, 2005, p. 1). It is because ofthe apparent incorporation of e-banking among the developing nationsby constructing strong infrastructure with the main focus being one-marketing, e-commerce, e-banking and many others. Internet bankingbegan with simple functions including real time information accessconcerning the interest rates calculating eligibility for loans andchecking the balances in the accounts. Nevertheless, the serviceshave fine-tuned into online payment of bills, cash transfer from oneaccount to the other, and management of cash services for individualsand corporate organizations (Bauer, Hammerschmidt&amp Falk, 2005, p.153).

Theinternet has enhanced the sprouting of new models of business invaried industries. Previous studies have revealed that the integratedretail banking models have faced challenges in the recent years. Itwas symbolized by the deconstruction of the consolidated models ofbanking as well as processes (Shih &amp Fang, 2006, p. 61). Quite alarge number of similar changes are taking place in the retailindustry, particularly the supermarkets given the rapid developmentof online shopping activities from wherever individuals may be.Changes such as channel development, service or product provision,operations, and value proposition model have particularly beensignificant. In their research, Salehi and Alipour (2010) believethat all big banks in Iran have put forward their interest in usinge-business as one of the key developments in the development of thebanking sector. Similarly, acceptance of e-banking, they say, relieson probably on the quality of the service, satisfaction and customerpreferences. One of the major reasons behind e-banking growth is thatwhen they are directly handled, they lower the costs of products’delivery. In addition, Salehi and Alipour suggests that since thebanking clients have become growingly comfortable with the beamingdigital age, they expect the financial service providers have nooption but to follow suit. Technology has taken over the bankingindustry, and the traditional paper work backlog is slowly but surelybeing erased in the digital age. Internet banking services haveincreasingly been expanding in the developed nations with the UK notbeing left behind even one bit (Barbesino, Camerani&ampGaudino,2005, p.329). It is mainly because of the widespread availability ofinternet devices such as computers and also the ease of internetaccess. However, in the developing countries, adoption of onlinebanking has been slower because of the dismal availability of theinternet infrastructure. Despite all the challenges these countriesare facing, they have still managed to swim in the murky waters andimplemented internet banking (Kuisma, Laukkanen&ampHiltunen, 2007,p. 75).

Arnaboldiand Claeys (2008) conducted a comparative analysis on the adoption ofonline banking. They noted that online banking is a result ofinnovation that is widely compelled by factors that are extrinsic tothe banking industry. The percentage of those households with theinternet access at home, increased rate of broadband penetration, andhigher expenditure on R&ampD utilization are all some of the factorsthat positively influence the performance of the internet banking.Whereas competition fails to wield an immediate effect on theperformance of the banks, the development of internet banking can beviewed as a sign of increased competitive banking markets. Thecontinued existence is likely to increase the transparency and therange of products. Clients aligned to quick and cheap depositaccounts very likely prefer internet banking. Thus, internet orientedbanks can cause invention in the banking sector. Internet banks tendto give banks a competitive advantage in the turbulent banking sectorcoupled with competition.

Accordingto KPMG (2013), mobile banking, digital platforms, tablets andsmartphones are revolutionizing how the customers purchase products,in both corporate and retail segments. Based on a recent survey, 64%of international banks surveyed asserted that they have either streamlive or have the plan of rolling out mobile applications meant fortheir corporate clients. From the client’s perspective, whereas 25%of the businesses in the US and corporations have resorted toadopting mobile banking by the end of 2013. The number is anticipatedto rise to almost 40% in the coming years. The increased cyber attackrisks have continued to test the resilience of the technologyinfrastructure of the bank and operating platforms. With the increasein online imposters, ‘hacktivists’ retaliation incidents andsponsored hacking, the need substitute and reinforce platforms andlegacy systems is becoming growingly more urgent. Automation,digitalization, hi-tech data analytics, and investments in vanguardtechnology is not merely a tool for cost management, but a responseto wealthier customer engagement and more racy risk management,particularly in response to the developing conduct agenda.Nevertheless, the investment scale needed to fund the technologicalrevolution is likely to be massive, with subsequent impact onshort-term profitability and return on equity (RoE) (KPMG, 2013).

Therevolution of the ICT has deformed the traditional banking businessmodel through making it possible for the banks to crack their comfortzones. It also creates the value chain to permit delivery of customerservice to be disintegrated into varied businesses. Therefore, forinstance, principally, internet banks disseminate securities andinsurance and banking products, nevertheless, not all the distributedproducts are created by their group (Barnes &ampCorbitt, 2003, p.273). However, the cardinal economic argument for dispersion ofembracing the internet as a channel of delivery is pegged on theanticipated reduction in the overhead expenses, enabled by reducingand ultimately erasing physical branches and their related costs. Itspecifically applies to and pertinent in the Spanish system ofbanking, which is among the most highly branched in Europe (Herington&ampWeaven, 2007, p. 404).

Accordingto Aliyu and Tasmin (2012), the banking industry, the backbone ofevery other economy is faced with numerous challenges, includingglobalization, competition, deregulation, relatively high cost of ICTinstallation and maintenance. ICT usage can result inlower costs, butthe impact on the profitability is still inconclusive, given thelikelihood of ICT impacts that come up due to incessant high demandof highly knowledgeable workforce, problems of increasing demand torealize the expectations of the customers for delivery of customerservice, information system trustworthiness and competition in theprovision of the financial services. The researchers’ findingsshowed that the enhancement of ICT in banking is mandatory in afast-changing marketplace, as the revolution in the ICT has presetthe stage for the extraordinary increase in the financial activitythroughout the world.

Developmentsin ICT have permitted improved efficiency in the bankingorganizations using modern software. Although the developments ofbusiness software begun in the 1970s, it is only in the last twodecades that organizations have rapidly accepted software as part oftheir business strategies (Yiu, Grant &amp Edgar, 2007, p. 336). Ithas been fast-tracked by the decrease in the costs of personalcomputers. Currently, banks, for example, are using programs such asSage to monitor and manage their accounts. Such programs are not onlycost-effective, but also reduce the time required to completetransactions. As a result, there has been a general reduction in thecosts of transacting business for organizations and cheaper costs ofgoods and services for consumers (Tan et al., 2010, p. 507).

Theinitial information technology only allowed organizations to usetechnology in doing business within the setting of the business. Forinstance, banking, the use of information technology was only capablewithin the setting of the bank. However, modern technologies haveallowed organizations to work outside their officers (Long &ampMcMellon,2004, p. 78). New technologies, such as video conferencing, havefacilitated organizations to move their operations outside theiroffices but still achieve their objectives. Cloud computing servicesallow organizations to reduce their investment in informationtechnology, but still enjoy the benefits of technology (Long&ampMcMellon, 2004, p. 78). For example, organizations no longerneed to invest in expensive software. Instead, they can use cloudcomputing to access such software and pay small fees. The changesthat have occurred in the past two decades have completely changedthe face of businesses. Today, it is virtually impossible to carryout business without information technology (Sukkar&ampHasan, 2005,p. 381). Most businesses are using information technology to developa competitive aged over their competitors. However, the use of suchtechnologies requires that such companies stay on top of the changesin information technology. The competitive edge can only be developedby changing constantly with the changes in technology(Bátiz-Lazo&ampWoldesenbet, 2006, p. 400).

Technologyhas changed the world, and globalization is responsible for thefaster rate with which he world is moving. It has now become easy fororganizations to have meetings even on short notice notwithstandingthe difference in distance. The future envisions a world where thingswill be done even faster than anticipated. The individual could be amember of five or more boards and manage to attend the meetings inone day (Nathan et al., 2012). Online meetings have reduced massivelythe costs that had formerly been incurred by organizations in termsof hotel accommodation, luxury vehicles for hire, and air travelingcosts (Md, Anton &ampSanjida, 2010, p. 2718). The ability ofmanagers to meet with clients, partners, and stakeholders in realtime erases the need for people to travel to a physical location toattend corporate meetings (Nathan et al., 2012). Online meetingalludes to the saying that technology has made the world a “globalvillage” management has been brought closer. Corporate meetingshave been made easier by defying the distance between various people.Multinational corporations have benefitted greatly because they canorganize meetings with all managers across the world. Through onlinemeeting smaller businesses seeking for partnership or markets fortheir products can organize an online meeting with their prospectivepartners (Bateman et al., 2012).

Onlinemeetings offer a better future for the corporate world now and in thefuture. Technology has changed the world, and globalization isresponsible for the faster rate with which he world is moving. It hasnow become easy for organizations to have meetings even on shortnotice notwithstanding the difference in distance (Khare, 2010, p.176). The future envisions a world where things will be done evenfaster than anticipated. The individual could be a member of five ormore boards and manage to attend the meetings in one day (Nathan etal., 2012). Online meetings have reduced massively the costs that hadformerly been incurred by organizations in terms of hotelaccommodation, luxury vehicles for hire, and air traveling costs. Theability of managers to meet with clients, partners, and stakeholdersin real time erases the need for people to travel to a physicallocation to attend corporate meetings (Nathan et al., 2012). Onlinemeeting alludes to the saying that technology has made the world a“global village” management has been brought closer. Corporatemeetings have been made easier by defying the distance betweenvarious people (Mouakket, 2009, p. 361). Multinational corporationshave benefitted greatly because they can organize meetings with allmanagers across the world. Through online meeting smaller businessesseeking for partnership or markets for their products can organize anonline meeting with their prospective partners (Bateman et al.,2012).

Asthe globalization continues, so is the technological knowhow andcompanies also changing their marketing strategies. The social mediawill increase business profitability because it is cheap, and themoney meant for marketing will be channelled elsewhere in orderincrease the business level (Karim, Rezaul&amp Hossain, 2009). Withthe growing digital revolution, marketing managers need always to getahead of technology in order to keep customers aware of theever-changing strategies. With improved marketing strategies,marketers will foresee the trends right in time so that they can makenecessary changes (Kaplan &ampHaenlein, 2010). Nevertheless, tosurvive, an online business must be able to thrive. This meansmanagers must come up with ways that enable their organizations toadapt quickly to changes in their environment, transform theirinfrastructure and come up with innovative solutions. Allowing otherorganizations to test the water for you have the disadvantage ofbeing left behind and providing rival organizations to define theirmarket niches. This means managers must calculate their risks andensure that their organizations are not behind the pack(Munusamy,Chelliah&ampMun, 2010, p. 398).

Thesecondary source adaptedfrom a consistent increase in adoption of internet banking since2000 to a 61% of the population having adopted internet banking. Thisis supported by

thetwo sources as shown in the two graphs.



Whilemost of the online attractions are focusing their innovation incontent, most of them have come to the realizations that theirinnovations must be consistent with the changes in device trends.Because of the fact that the world internet-use is tilting towardsthe use of mobile devices, most online sites have engaged in makingtheir content innovation consistent with device innovations (Ahmad,2005, p. 317). Markets need to see the big picture by ensuring thatthey keep abreast of changes in technology and to adapt to suchtechnologies appropriately. Individuals and companies are coming upwith amazing solutions aimed at ensuring future success(Floh&ampTreiblmaier, 2006, p. 97). Therefore, to stay competitivein the future, managers and marketers must ensure that they come upwith solutions aimed at facilitating future success. For example, nowthat the current trends are indicating that the world is slowlymoving away from desktop browsing. Marketers and managers must ensurethat their activities are innovative enough to offer mobile browsingalternatives (Corrocher, 2006, p. 533).

Theliterature review has aided in bringing forth what other studies havedone regarding internet banking. Based on the research questions, theliterature review helps in relating the previous studies with thisstudy.


Inorder to help in answering the research questions, the study wasmostly based on secondary research from journals, magazines, articlesand other authentic websites. I used postal questionnaires that weresent to the customers and senior bank managers fromselectedcommercialbanksLondon.Usingpostal questionnaires enhancesreliability of a given study because it is often easier for theresearcher to have standardized questions. Each respondent willanswer the same question. Closed questions means that the researchercannot misinterpret the meanings acquired from the answers. Closedquestions shows the intention of the respondent by indicating “Yes,No, or Don’t Know.” The ease with which the questionnaires can berepeated offers the possibility of accessing a large number ofrespondents. Banks tend to have large volumes of data. Therefore,using postal questionnaire is necessary because respondents could bewidespread throughout a large area.

3.1Research Design

Theresearch being a quantitative one an exploratory research design wasdeemed to be the most suitable one given the nature of theinvestigated issue. Postal questionnaires were used to seek the viewsof the customers regarding internet banking. The postalquestionnaires were sent to 324 customers and 43 senior bankmanagers. The questionnaires were divided into four sections whenasking. In order to make it easy for the respondents to answer thequestions, they should be clear and easily understandable. The formatof the questionnaire such as length, paper color, and layout isalways important for consideration. The variables were measured usingthe five-point Likert Scale stemming from strongly disagree at 1 andstrongly agree at 5.

3.2Data Collection

Thestudy sample comprised of ten commercial banks in the UK. All thebanks included were from London, and they also had their headquartersin London. Initially, the use postal questionnaires for datacollection on internet banking was necessary because it was moreeffective both in terms of cost and time-saving. In addition, it issimple to collect as well as analyze. In addition, thesequestionnaires give the respondents anonymity they so desire. Thus,they tend to have more willingness to give their genuine answers onsome personal questions. In addition, in this case, the researchercannot influence the results with these questionnaires compared tosemi-structured interviews. As a result, the questionnaire isutilized in the study as the source of primary data. The design wasmeant to tailor the research along what other literatures have foundregarding internet banking. The other methodology was the use wasreporting of secondary data from two banks which I requested toprovide data on the adoption rate of internet banking. The first isthe Lloyds Banking Group which presented the history of itscustomers’ adoption rates of internet banking since 1995. The otherwas the Metro Bank whose adoption rate was reported from 1999 to2013.

Whencarrying out the study, there were some challenges. For instance, thequestionnaires had a misprint just before being sent until Iproofread to confirm the questions. However, I realized this in thenick of time and made the necessary amendments before reprinting themagain. The other challenge was arriving at the sample size.Initially, I had thought of having a larger sample size for validityand authenticity purposes. However, this was not possible owing tothe expenses involved. As such, I resorted to a sample size of 324.Making such changes was important for the study in that the misprintswere going to confuse the respondents and a larger sample was goingto suffocate the progress of the study.

Insummary, the methodology is the core of the study because it aids inconfirming the findings of the study by either rejecting orconfirming the research question. The methodology used postalquestionnaires for data collection and a moderate sample size of 253customers and 43 managers.


Itwas clear that virtually most of the customers were pleased with theidea of internet banking, saying that it was an idea whoseimplementation had long been overdue. Of the 324 postalquestionnaires sent to the respondents, there was only 253 (78%)response rates from the participants. Based on the 253 who respondedthrough the questionnaires,205(81%) of the respondents believed thatbanks had a competitive advantage when they employed internet bankingas a strategy. Among the bank managers, 243(96%) agreed that internetbanking had huge significance on competitive advantage in the bankingindustry. On the other hand, 10(4%) of the managers said they wereunsure whether the competitive advantage gained by the banks was downto internet banking. Among the customers, 99(39%) were females while144(61%) were males from different banks. In addition, the majorityof those who responded were aged between 25 and 44, with the agegroup 25-34 at 30.8% and 35-44 at 21.3%. Upon adding the twopercentages, 30.8% and 21.3% respectively, it totals to 52.1% of thetotal number of respondents. This is an indication of the digital agegroup who has embraced the emergence of online banking as a means ofconducting financial transactions. Of those that approved internetbanking said that it has been a revelation that enables them conductstheir businesses without having to go and line up in the bankinghalls for hours. The fact that things have to be done in a manner istransparent was in itself a testament of faith in the internetbanking.

Inaddition, there was large number of respondents below £30,000because of the large number of unemployed and students being amongthe respondents. On the strategic decisions that can be adopted toplace a bank high up the ladder in the competitive environment, thecustomers suggested that what they always want as customers is a morepersonalized service delivery to them. In that regard, CustomerRelationships Management (CRM) is the best way in which the managersof banks can employ in order that they can work on the issues thataffect the customers in real time. Top of their list is alwaysability to bank online among other important factors such asaccessibility, security, and design. The customers indicated thatthey were always happy when they received calls from their banksconcerning the loaning programs and other services. In other words,the customers are in support of the fact that internet and telephonebanking is important for any bank in this digital age.

Basedon the data we were given from the two banks in the UK regarding theadoption rates of internet banking, the following results wererealized.

Table1: Table of Adoption rates at Lloyds Banking Group from 1995-2013


Number of Customers in one Branch

Percentage (%)


























































Thetable shows the adoption rates of the bank’s customers with theadoption showing a consistent rise in internet banking based on thestatistics. On a similar note, we asked for data regarding internetbanking adoption at the Metro Bank in the UK. The following tableshows the data we were given by the statistics department at MetroBank on internet banking adoption rates since 1999.

Table2: Adoption rate of internet banking at Metro Bank from 1999-2013


Number of Adopting Customers

Percentage (%)














































Thetwo companies accepted our request on secondary data from theirrespective statistics department. On that note, there is evidentindication of slow growth in the 1990s and a drastic increase towardthe mid 2000s. It has since become important for most of thecustomers who have since seen the need to adopt the internet banking.

Insummary, the results support quite a large chunk of what literaturereview presents. In sum, quite a large number of individuals say thatinternet banking has been a revelation in the modern world for banksin terms of competitive advantage. The same was supportedoverwhelmingly by the managers who viewed it as an important aspectfor economic growth.


Toexplain the adoption of internet banking among customers, Fishbeinand Ajzen’s theory of reasoned action (TRA) is applicable. Thetheory is pegged on the supposition that the behaviour of anindividual determines his or her behavioural intentions (Belleau etal., 2007, p. 244). This is collectively influenced by the attitudeof the individual toward that behaviour and the subsequent subjectivenorm. Behavioural intention is a significant factor to carry outtarget behaviour because the intention arouses motivational factorsthat influence the behaviour (Belleau et al., 2007, p. 244). Theother theory is Maslow’s Hierarchy of Needs that implies anindividual will stop at nothing until he or she achieves the mostdesirable thing in life. Therefore, consumers always want to haveperfect faces or figures they always see in the media and wouldensure that they work hard toward achieving that status (Valacich,Parboteeah&amp Wells, 2007, p. 84). Thus, internet banking satisfiescustomers and that is why it is adopted.

5.1Education and Internet Banking

Theresults show that 96% and 95% of the respondents had the knowledgeand awareness respectively of internet banking. It shows that mostpeople have the knowledge on internet banking even though they maynot be using it. Education is the other variable that may have playeda role in the young being highest users of internet banking. Thosewith bachelors were 93(36.8%), meaning that the educational level hasenhanced increased knowledge and awareness of internet banking. Basedon other secondary data on the usage of internet banking in thebanking industry, it is clear that the previous research has beenconfirmed regarding use of internet banking.

Thisis shown in Table 1.

8.2Table 3: Variables on Internet Banking




Percent (%)













55 and above
















Ph. D













Government officer

Private officer
















Below (£) 30,000



More than 100,001









IB Knowledge







IB Awareness







Thebasic assumption is that internet banking enhances competitiveadvantage in the current banking industry. That offers no chance forthe traditional banking methods that requires the use of paper work.Despite the apparent success of internet banking in most banks, thereare tacit factors that influence the adoption of e-banking amongcustomers.

5.2Customer Satisfaction

Thelevel of satisfaction among the customers was highly injected by thefact that their banks embraced internet banking. Results show thatonline banking in the UK is an important aspect in the currentbanking, and most of the customers deem it as a necessity. Thecurrent digital age has affected the lifestyles of most people whohave made it their comfort zone. That only means that everything elsehas to be tailored to embrace that comfort zone. One would want to goanywhere and be able to transact his or her businesses from thatplace without necessarily having to go to their respective banks. Theimplication is that banks have no choice but follow suit in order toacquire, retain and satisfy the customers.

Fromthe reports obtained from the Metro Bank,it was evident thatcustomers have resorted to adopting internet banking over the years.This only means that through the consumer behavioral theory, theclients were influenced into adopting internet banking over time inorder to enhance their banking activities.


Onthe other hand, the banks saw this as a conformity issue and alsothought it would be a way of boosting their competitive advantage.Consumers tend to make decisions on what they want to do. Metro Bankhas shown that its adoption rates saw a sharp increase in 2005 andthen steadied in 2006 to 2013. This could have been because of steadysensitization of the customers on the importance of internet banking.The graph below is an indication of how the Metro Bank has shown thatincrease.

Almostsimilar results have been shown by report from the Lloyds BankingGroup whose results were from 1995 to 2013. It indicated the adoptionrates over the years in terms of internet banking. The followinggraph shows how internet banking has been adopted by customers in thebank.

Therewas a steady growth of internet banking between 1995 and 2001 perhapsbecause of poor internet banking infrastructure. However, it shot upin 2002 because more people were beginning to use internet and theinfrastructure was boosted. The new millennium was the beginning ofincreased technology use. By 2013, the adoption rate had hit 96%adoption and still counting. The implication was that things had beenchanging in terms of adoption. Consumers tend to choose things thatbetter their service delivery, thus they chose to be part of theinternet banking. In addition, the increased adoption was alsobecause of customers requiring a more personalized banking to suittheir more laid-back lifestyle where things come to them as opposedto them looking for them.

E-bankinghas meant that customers use the credit cards every time in carryingout their financial transactions. More often, the credit card serviceproviders liaise with the respective banks of the customers on howthey can channel money from their accounts. The digital age had madeit such that the banks are bringing services to their customers asopposed to the previous period when customers looked for bankingservices (Singhal&ampPadhmanabhan, 2008, p. 101). Apparently, it isno surprise that the banking industry in the UK considers internetand telephone banking as tools of competitive advantage. Though thereare challenges about to internet banking based on cyber crimes andfraudsters. However, these have not deterred customers from embracingonline banking. The banks have ensured that internet banking issecure and private. The findings are consistent with the literaturesfrom previous studies (Alagheband, 2006). Internet banking plays anintegral role in enhancing competitive advantage for the banks. Thebanks use different strategic decisions in ensuring that theirservices remain top-drawer. The banks also collect feedbacks fromtheir customers on their recommendations or criticisms and apply thenecessary changes to the services. The banks in the UK employ thebest ICT specialists who help in the constant innovation ofapplications that enhance easy banking activities (Tiwari,Buse&ampHerstatt, 2007).

Thoughit is an invisible infrastructure, it has a host of complextechnology systems that each function within each bank is pegged on.From assessing application of loans, to noticing money laundering, topaying people in their accounts, internet banking performs a hugerole in the modern bank (Sadeghi&ampFarokhian, 2011, p. 374).Simplified, when the technology fails to work, the bank does notwork. Thus, the public would always want to know why. It is widelyrecognized that technology as an infrastructure throughout thefinancial system is extraordinarily intricate. It is to the pointwhere the infrastructure does not necessarily serve the myriad ofbanks. Instead, it hinders their functioning (Cao &ampMokhtarian,2005). In the past years, there has been the construction of systemsto implement a consistent stream of important changes, pushed bycustomer, market and regulatory demands. As the technology estatekeeps growing, it has also enhanced complexity, and it has restrictedthe ability of the banks to serve the banks and the larger economy.The intricacies inhibit data – the impetus of any financial system– from flowing to where it should be used in making decisions onsuch activities as risk exposure, lending to reducing crimesassociated with finances.

Nevertheless,internet banking has some benefits such as improving cash managementamong the customers. Internet banking facilities accelerate cashcycle and also increase businesses’ efficiency as a wide variety ofcash management instruments is accessible on the internet sites allthe UK (Wright, Eid, &amp Fleisher, 2009, p. 941). In addition,funds management is also enhanced by internet banking as customerscan easily download history of varied accounts and carry out analysison their personal computers prior to affecting any kind oftransaction on the website. The result is that funds management isimproved. On the other hand, internet banking has experiencedchallenges. For instance, adoption of global technology to thelocalized needs has proved to be challenging for most of the banks.In order to successfully carry out this, it requires a reasonablelevel of human capacity building and infrastructure before adoptionof the system. In addition, confidentiality is one other aspect thatis often threatened by the technology. However, with the hackersalways around looking for loopholes, they have managed to hack intoaccounts of customers and access the bank account details. Thefindings of the study are important in the sense that bankers can usethem to increase the need to encourage many more customers to adoptinternet banking. The banking industry will be relying on the resultsto hatch their marketing strategies. It can also be explained basedon the results that internet banking is increasingly become the mostimportant means of money transactions, thus, it could mean that bankscould soon become extinct with the more personalized format beingadopted in large-scale. There is the need for further research onwhat would happen to traditional banking.

Thediscussion has recapped the relationship between the literaturereview, results and the research questions. The discussion hasrevisited the results and categorically explained what the resultswere about and how they have aided in realizing the objectives of thestudy. Discussion is important in any study as it links the researchquestions and results that explain the findings


Basedon the findings, have proved that internet banking is an importantpart in building on a strong competitive advantage in themarketplace. The revolution of the internet banking has altered thebanking business through scaling borders and creating newopportunities. Apparently, the customers are happier and satisfiedwhen they operate in banks that have internet banking. In the UK, ithas proved to be important that banking is made easier throughinternet banking with most individuals working toward improving thebanking systems from time to time. The study confirms that internetbanking alongside the use of telephone is important in the currentcompetitive world. No banking organization is willing to be leftbehind in the quest for excellent financial services delivery.Apparently, the current lifestyle has become one where services cometo the customers with most of the services being personalized at thedoorstep. On that basis, every other customer would want toexperience banking the way they want. Consequently, the bankingindustry has gained a competitive advantage, particularly those thathave employed online banking services. Customers prefer to have theirbanking personalized. Thus, they are always happy that banking hasgone live. The findings agree with the previous literature oninternet banking. Based on the findings, internet banking has becomea necessity for banks because without it, no bank can be able tocompete.

Thereare a number of factors that play an important role in determiningthe adoption of internet banking among the customers. The factorsinclude speed, design, accessibility, reliability, and security.Customers would want to associate with a service that takes theirbest interests at heart. The research has also shown that over theyears there has been a gradual adoption of internet banking withinthe last two decades. The fact that there was a large number ofrespondents supporting adoption of internet banking is an indicationthat the current society has become dependent on technology.


Internetbanking should be adopted by most banks as a way of conforming withthe fast-paced world where there is no need for physical presence toget a service or goods. Online transactions have taken over and soare the banks. Therefore, it is important that most banks shouldemploy internet banking and encourage most of their clients to adoptinternet banking as a means of improving their competitive advantage.

6.2Future Work

However,the other studies need to use larger sample sizes in order to enhancevalidity and ease generalisability of the study findings. Inaddition, further research should also investigate whether the bankswill do away with the physical banking and concentrate mainlyinternet banking. However, there is the need for further research onwhether the increased use of internet by banks affects theirperformance in the long-run because fewer customers will be going tothe banking halls.

7.0References List

Ahmad,A.E.M.K. &amp Al-Zu’bi, H.A. (2011). E-banking Functionality andOutcomes of Customer Satisfaction: An Empirical Investigation,International Journal of Marketing Studies, 3(1): 50-65.

Ahmad,R. (2005). A conceptualisation of a customer-bank bond in the contextof the twenty-first century UK retail banking industry.&nbspInternationalJournal of Bank Marketing,&nbsp23(4),317-333.

Alagheband,P. (2006). Adoption of electronic banking services by Iraniancustomers.&nbspMaster`sthesis, Luela University of Technology, Iran.

Al-Hawari,M., Hartley, N., &amp Ward, T. (2005). Measuring banks` automatedservice quality: a confirmatory factor analysis approach.&nbspMarketingbulletin,16(1),1-19.

Baraghani,S. N. (2008). Factors influencing the adoption of internet banking.LuleaUniversity of Technology.

Barbesino,P., Camerani, R., &ampGaudino, A. (2005). Digital finance in Europe:competitive dynamics and online behaviour.&nbspJournalof Financial Services Marketing,&nbsp9(4),329-343.

Barnes,S. J., &ampCorbitt, B. (2003). Mobile banking: concept andpotential.InternationalJournal of Mobile Communications,&nbsp1(3),273-288.

Bátiz-Lazo,B., &ampWoldesenbet, K. (2006). The dynamics of product and processinnovations in UK banking.&nbspInternationalJournal of Financial Services Management,&nbsp1(4),400-421.

Bauer,H. H., Hammerschmidt, M., &amp Falk, T. (2005). Measuring thequality of e-banking portals.&nbspInternationaljournal of bank marketing,&nbsp23(2),153-175.

Belleau,B. D., Summers, T. A., Xu, Y., &ampPinel, R. (2007). Theory ofReasoned Action Purchase Intention of Young Consumers.&nbspClothingand Textiles Research Journal,&nbsp25(3),244-257.

Borzekowski,R., Elizabeth, K. K., &ampShaista, A. (2008). Consumers` use ofdebit cards: patterns, preferences, and price response.&nbspJournalof Money, Credit and Banking,&nbsp40(1),149-172.

Brodie,R. J H Winklhofer N. E Coviello and W.J Johnston, (2007). Ise–marketing coming of age? An Examination of the Penetration ofe–marketing and Firm Performance. Journalof Interactive Marketing, 21,2-21.

Burke,K., &ampSewake, K. (2008). Adoption of computer and internettechnologies in small firm agriculture: A study of flower growers inHawaii. Journalof extension,&nbsp46(3).

Cao,X., &ampMokhtarian, P. L. (2005). The intended and actual adoptionof online purchasing: a brief review of recent literature.&nbspInstituteof Transportation Studies.

Celik,H. (2008). What determines Turkish customers` acceptance of internetbanking?.&nbspInternationalJournal of Bank Marketing,&nbsp26(5),353-370.

Chong,A. Y. L., Ooi, K. B., Lin, B., &amp Tan, B. I. (2010). Onlinebanking adoption: an empirical analysis.&nbspInternationalJournal of Bank Marketing,&nbsp28(4),267-287.

Christopher,G C. Mike L. Visit and W. Amy, (2006). A Logit Analysis ofElectronic Banking in New Zealand. InternationalJournal of Bank Marketing, 24,360-383.

Consoli,D. (2005). The dynamics of technological change in UK retail bankingservices: an evolutionary perspective.&nbspResearchPolicy,&nbsp34(4),461-480.

Corrocher,N. (2006). Internet adoption in Italian banks: An empiricalinvestigation.&nbspResearchPolicy,&nbsp35(4),533-544.

Durkin,M. (2007). Understanding registration influences for electronicbanking. InternationalReview of Retail, Distribution and Consumer Research,&nbsp17(3),219-231.

Floh,A., &ampTreiblmaier, H. (2006). What keeps the e-banking customerloyal? A multigroup analysis of the moderating role of consumercharacteristics on e-loyalty in the financial serviceindustry.&nbspJournalof Electronic Commerce Research,&nbsp7(2),97-110.

Han,L. (2008). Bricks vs clicks: entrepreneurial online banking behaviourand relationship banking.&nbspInternationalJournal of Entrepreneurial Behaviour &amp Research,&nbsp14(1),47-60.

Harrison,T., &amp Waite, K. (2005). Critical factors affecting intermediaryweb site adoption: understanding how to extende-participation.&nbspJournalof Business &amp Industrial Marketing,&nbsp20(4/5),187-199.

Heart,T., Pliskin, N., &amp Curley, K. (2007) Remote application servicesas means for aligning business and IT. InternationalJournal Of Electronic Business,5(2),176-187.

Herington,C., &ampWeaven, S. (2007). Can banks improve customer relationshipswith high quality online services?&nbspManagingService Quality,&nbsp17(4),404-427.

Herington,C., &ampWeaven, S. (2009). E-retailing by banks: e-service qualityand its importance to customer satisfaction.&nbspEuropeanJournal of Marketing,43(9/10),1220-1231.

Ibeh,K. I., Luo, Y., &ampDinnie, K. (2005). E-branding strategies ofinternet companies: some preliminary insights from the UK.&nbspTheJournal of Brand Management,&nbsp12(5),355-373.

Ibrahim,E. E., Joseph, M. and Ibeh, K. I. N. (2006), Customers’ perceptionof electronic service delivery in the UK retail banking sector,InternationalJournal of Bank Marketing, 24(7),475-493.

Jayawardhena,C. and Foley, P. (2000) Changes in the Banking sector-the case ofinternet banking in the UK. InternetResearch, 10(1),19-31.

Johnson,K. W. (2005). Recent developments in the credit card market and thefinancial obligations ratio.&nbspFed.Res. Bull.,&nbsp91,473.

Kaplan,A. M., &ampHaenlein, M. (2010). Users of the world, unite! TheChallenges and Opportunities of Social Media,&nbspBusinesshorizons,53(1),59-68.

Karim,Z., Rezaul, K. M., &amp Hossain, A. (2009, November). Towards secureinformation systems in online banking. In&nbspInternetTechnology and Secured Transactions, 2009. ICITST 2009. InternationalConference for&nbsp(pp.1-6). IEEE.

Kassim,N. M., &amp Abdulla, A. K. M. A. (2006). The influence of attractionon internet banking: an extension to the trust-relationshipcommitment model. InternationalJournal of Bank Marketing,&nbsp24(6),424-442.

Khalfan,A. M. S., AlRefaei, Y. S., &amp Al-Hajery, M. (2006). Factorsinfluencing the adoption of Internet banking in Oman: a descriptivecase study analysis. InternationalJournal of Financial Services Management,&nbsp1(2),155-172.

Khare,A. (2010). Online banking in India: An approach to establish CRM.Journalof Financial Services Marketing,&nbsp15(2),176-188.

KPMG,(2013). Reinvention on UK Banking: UK Banks: Performance BenchmarkingReport, retrieved from

Kuisma,T., Laukkanen, T., &ampHiltunen, M. (2007). Mapping the reasons forresistance to Internet banking: A means-end approach.&nbspInternationalJournal of Information Management,&nbsp27(2),75-85.

Laukkanen,P., Sinkkonen, S., &ampLaukkanen, T. (2008). Consumer resistance tointernet banking: postponers, opponents and rejectors.&nbspInternationalJournal of Bank Marketing,&nbsp26(6),440-455.

Lewis,B. R., &ampSoureli, M. (2006). The antecedents of consumer loyaltyin retail banking.&nbspJournalof consumer Behaviour,&nbsp5(1),15-31.

Lichtenstein,S., &amp Williamson, K. (2006). Understanding consumer adoption ofinternet banking: an interpretive study in the Australian bankingcontext. Journalof Electronic Commerce Research,&nbsp7(2),50-66.

Long,M. &ampMcMellon, C (2004), Exploring determinants of retail servicequality on the internet, Journalof Service Marketing, 18(1),78-90.

Loonam,M., &ampO`Loughlin, D. (2008). An observation analysis of e-servicequality in online banking.&nbspJournalof Financial Services Marketing,&nbsp13(2),164-178.

Lyytinen,K &amp Rose, G.M. (2003). The Disruptive Nature of InformationTechnology Innovations: The Case of Internet Computing in SystemsDevelopment Organizations, Ohio: Management Information SystemsResearch Center, University of Minnesota, MISQuarterly,27(4):557-596.

Md,A. B., Anton, A. K., &ampSanjida, P. (2010). Adoption of e-bankingin Bangladesh: An exploratory study.&nbspAfricanjournal of business management,4(14),2718-2727.

Migdadi,Y.K.A. (2008). Quantitative Evaluation of the Internet BankingService Encounter`s Quality: Comparative Study between Jordan and theUK Retail Banks. Journal od Internet Banking and Commerce, 13(2):

Montgomerie,J. (2006). The financialization of the American credit cardindustry.&nbspCompetition&amp Change,&nbsp10(3),301-319.

Mouakket,S. (2009). Investigating the factors influencing customers` adoptionof online banking in the United Arab Emirates.&nbspJournalof International Technology and Information Management,&nbsp18(3-4),361.

Munusamy,J., Chelliah, S., &ampMun, H. W. (2010). Service quality deliveryand its impact on customer satisfaction in the banking sector inMalaysia. InternationalJournal of Innovation, Management and Technology,&nbsp1(4),398-404.

Nathan,M. et al., (2012) “In Case you Missed It: Benefits ofAttendee-Shared Annotation for Non-Attendees of Remote Meetings,”In&nbspProceedingsof the ACM 2012 conference on Computer Supported CooperativeWork&nbsp(pp.339-348). ACM.

Novak,T. P., Hoffmann, D. L., &amp Yung, Y. (2000). Measuring the customerexperience in online environments structural modeling approach.MarketingScience, 19(1):22-42.

Papaioannou,Eugenia, et al. (2013). Investigating customer satisfactiondimensions with service quality of online auctions: an empiricalinvestigation of e-Bay.&quotInformationSystems and e-Business Management1-18.

Papasolomou,I., &ampVrontis, D. (2006). Using internal marketing to ignite thecorporate brand: the case of the UK retail bank industry.&nbspJournalof Brand Management,&nbsp14(1),177-195.

Park,I., Amit, B., &amp H. Raghav, R. (2010). Assurance seals, on-linecustomer satisfaction, and repurchase intention.&nbspInternationalJournal of Electronic Commerce,&nbsp14(3):11-34.

Polasik,M., &amp Wisniewski, T. P. (2009). Empirical analysis of internetbanking adoption in Poland.&nbspInternationalJournal of Bank Marketing,&nbsp27(1),32-52.

Poon,W. C. (2007). Users` adoption of e-banking services: the Malaysianperspective.&nbspJournalof Business &amp Industrial Marketing,&nbsp23(1),59-69.

Qureshi,T. M., Zafar, M. K., &amp Khan, M. B. (2008). Customer acceptance ofonline banking in developing economies.&nbspJournalof Internet Banking and Commerce,&nbsp13(1),1-9.

Sadeghi,T., &ampFarokhian, S. (2011). The role of behavioral adoptiontheories in online banking services.&nbspMiddle-EastJournal of Scientific Research,&nbsp7(3),374-380.

Salehi,M. &ampAlipour, M. (2010). E-Banking in Emerging Economy: EmpiricalEvidence of Iran. InternationalJournal of Economics and Finance, 2(1),201-209.

Sanchez-Franco,M. J. &amp Francisco, J. R-C. (2010). Virtual travel communities andcustomer loyalty: Customer purchase involvement and web sitedesign.&nbspElectronicCommerce Research and Applications,&nbsp9(2):171-182.

Sangeetha,J. (2012). Development of a Service Quality Scale for MultipleTechnology Interfaces in Commercial Banking. Journalof Internet Banking and Commerce, 17(3),

Sayar,C., &amp Wolfe, S. (2007). Internet banking market performance:Turkey versus the UK.&nbspInternationalJournal of Bank Marketing,&nbsp25(3),122-141.

Shah,M. H., &amp Siddiqui, F. A. (2006). Organisational critical successfactors in adoption of e-banking at the Woolwich bank.&nbspInternationalJournal of Information Management,&nbsp26(6),442-456.

Shih,Y. Y., &amp Fang, K. (2006). Effects of network quality attributeson customer adoption intentions of internet banking.&nbspTotalQuality Management &amp Business Excellence,&nbsp17(1),61-77.

Singhal,D and V. Padhmanabhan (2008). A Study on Customer Perception Towardsinternet Banking: Identifying major contributing factors. TheJournal of Nepalese Business Studies. v(1),101-111.

Sukkar,A. A., &ampHasan, H. (2005). Toward a model for the acceptance ofinternet banking in developing countries.&nbspInformationTechnology for Development,&nbsp11(4),381-398.

Tan,K. S., Chong, S. C., Loh, P. L., &amp Lin, B. (2010). An evaluationof e-banking and m-banking adoption factors and preference inMalaysia: a case study.&nbspInternationalJournal of Mobile Communications,&nbsp8(5),507-527.

Thulani,D., Tofara, C., &amp Langton, R. (2009). Adoption and Use ofInternet Banking in Zimbabwe: An Exploratory Study.&nbspJournalof Internet Banking &amp Commerce,&nbsp14(1).

Tiwari,R., Buse, S., &ampHerstatt, C. (2007). Mobile services in bankingsector: the role of innovative business solutions in generatingcompetitive advantage. Technologyand Innovation Management Working Paper,(48).

Valacich,J. S., Parboteeah, D. V., &amp Wells, J. D. (2007). The onlineconsumer`s hierarchy of needs.&nbspCommunicationsof the ACM,&nbsp50(9),84-90.

Wan,W. W., Luk, C. L., &amp Chow, C. W. (2005). Customers` adoption ofbanking channels in Hong Kong.&nbspInternationalJournal of bank marketing,&nbsp23(3),255-272.

Wright,S., Eid, E. R., &amp Fleisher, C. S. (2009). Competitiveintelligence in practice: empirical evidence from the UK retailbanking sector.&nbspJournalof Marketing Management,&nbsp25(9-10),941-964.

Wu,D., &amp Wu, D. D. (2010). Performance evaluation and risk analysisof online banking service.&nbspKybernetes,&nbsp39(5),723-734.

Yang,K. C. (2005). Exploring factors affecting the adoption of mobilecommerce in Singapore.&nbspTelematicsand informatics,&nbsp22(3),257-277.

Yang,Z. Jun, M. and Peterson, R. (2004). Measuring customers perceivedonline service quality: scale development and managerialimplications. InternationalJournal of Operations and Production Management, 24(11/12),1149-1174.

Yang,Z., &amp Jun, M. (2002). Consumer perception of e-service quality:from internet purchaser and non-purchaser perspectives. Journalof Business Strategies, 19(1),19-41.

Yang,Z., &amp Fang, X. (2004). Online service quality dimensions andtheir relationships with satisfaction: A content analysis of customerreviews of securities brokerage services. InternationalJournal of Service Industry Management, 15(3),302-326.

Yaya,L. H. P., Marimon, F., &ampCasadesus, M. (2011). Customer`s loyaltyand perception of ISO 9001 in online banking.&nbspIndustrialManagement &amp Data Systems,&nbsp111(8),1194-1213.

Yiu,C. S., Grant, K., &amp Edgar, D. (2007). Factors affecting theadoption of Internet Banking in Hong Kong—implications for thebanking sector. InternationalJournal of Information Management,&nbsp27(5),336-351.

Zeithaml,V.A., Parasuraman, A., &amp Malhotra, A. (2000). A conceptualframework for understanding e-service quality: implications forfuture research and managerial practice. MarketingScience Institute and Dell star,working paper.

Zhao,A. L., Hanmer-Lloyd, S., Ward, P., &amp Goode, M. M. (2008).Perceived risk and Chinese consumers` internet banking servicesadoption.&nbspInternationalJournal of Bank Marketing,&nbsp26(7),505-525.


Thisquestionnaire is meant to ask the respondent questions on internetbanking with a viewto realizing the objective of whether it enhancescompetitive advantage. We would want to know your opinion on internetbanking and traditional banking in the current digital age. Pleaseknow that your identity cannot be revealed to anyone and will besafely concealed only for the purposes of this study. Yourparticipation in this study will be highly appreciated.


  1. Gender Male ( ) Female ( )

  2. How old are you?

18-24 ( ) 25-34 ( ) 35-44 ( ) 45-54 ( ) 55 and above

  1. Do you have a bank account? Yes ( ) No ( )

  2. Which bank do you do your banking with?

  3. What is your level of Education (Tick one)

Certificate( ) Diploma ( ) Bachelor ( ) Master ( ) Ph.D ( )

  1. What is your occupation?

Student( ) Self-employed ( ) Government Officer ( ) Private sector officer () Unemployed ( ) Other ( )

  1. What is your level of Income?

Below£30,000 ( ) 30,001-60,000 ( ) 60,001-100,000 ( ) 100,001 and above ()

  1. What is your understanding of internet banking?

  2. Has internet banking made banking easier?

Yes No Don’tKnow

  1. How long have you been banking?

  2. For how long have you used internet banking?

  3. Is internet banking better than traditional banking?

Yes No Don’t Know


  1. What would recommend to be changed on internet banking if meet the manager now?

  2. If internet banking were scrapped, what do you think would happen to the banking industry?

  3. Do you think internet banking offer competitive advantage to banks in the current competitive world?

Stronglydisagree (1) Moderately disagree (2) Disagree (3) Moderately Agree(4) Strongly agree (5)

  1. What is your opinion on personalized banking?

  2. If you are using internet banking, what has been your experience with the system?

  3. Do you think the banking industry can remain competitive by using traditional modes of banking in a technologically driven world?

  4. Why do you think people adopt internet banking over traditional banking methods?

  5. Do you think traditional banking can be successful in the current technology driven world?

  6. What do you think as a customer you would change about internet banking and traditional banking?

  7. If you prefer internet banking, what has drawn you closer to internet banking that is not found in the traditional banking?