Determinants of Internet Banking Acceptance in India – A Structural Equation Modeling (SEM) Approach

Internet banking provides huge benefits to banks' in cost savings, improved customer relationships and differentiating their offerings from competitors. Although the Internet banking services were introduced in India for more than a decade ago, the adoption among the bank customers is still very low. This study aims to examine the factors that determine adoption intentions of customers to use Internet banking services in India. The research proposed a model called ‘Internet banking Acceptance in India,' constructs of which were developed based on the Unified Theory of Acceptance and Use of Technology (UTAUT) and three additional variables as identified to be context-specific. The data presented in this study are based on 325 questionnaires collected from individual bank customers' in Hyderabad city. The empirical findings of the study confirm the relationships between the identified latent variables and their impact on the adoption of Internet banking services. The proposed model explained about 66% of the variance in behavioural intention to adopt the Internet banking in India. This study contributes to the literature by providing a new research framework for predicting Internet banking adoption in India and its findings provide useful insights for bank managers and policy makers in planning Internet banking promotion strategies