Internet Banking and Customer Resistance

Internet banking (IB) is one of the latest innovations in the banking sector to attract and retain customers. The penetration of internet in India is abysmally low in comparative terms and when compared to other developed countries, India is still in the early stages of internet banking growth and development. It is found that the number of customers using IB services is not increasing in tune with the adoption of technology by banks in India. This paper is just a small step in identifying the factors contributing to customer resistance to the use of IB through an extensive review of literature. The inhibiting factors or the barriers for the adoption of IB are mainly summarized into functional and psychological barriers. The functional barriers include the usage barrier, the value barrier and the risk barrier, whereas the psychological barriers can be divided into the tradition barrier and the image barrier. An understanding of these factors is essential for bank administrators to devise policy measures that can remove these barriers. The potential for IB India is immense and therefore banks in India should concentrate on increasing the use of internet for delivering banking services at low cost to customers