Adoption and Usage of Online Services in the Presence of Complementary Offline Services: Retail Banking

The availability and variety of online services has increased dramatically in recent years. Many questions remain, however, regarding patterns of online service use, consumer preferences when using online services, and how consumers substitute between equivalent online and offline services. Using an extensive data set of consumer adoption and usage of the online banking service of a major German bank, this paper analyzes consumers’ adoption and usage of online banking over the period August 2001 to July 2003, including the effect of demographics and branch banking on usage of online banking. We also examine the relationship between Internet availability and channel choice as well as usage. Finally, we analyze the effect of channel usage on customer level and product-specific revenues earned by the bank and derive revenue implications of online banking.