International Journal of Computer Theory and Engineering, Vol. 5, No.

1, February 2013

Combination of TAM and TPB in Internet Banking Adoption

Rahmath Safeena, Hema Date, Nisar Hundewale, and Abdullah Kammani

security failures might have contributed to the publics

AbstractIT Services is considered as the key driver for the concern and lack of acceptance of Internet banking [9].
changes taking place around the world. Internet banking (IB) Technology Acceptance Model (TAM) is the widely used
is the latest and most innovative service and is the new trend
model in describing the user acceptance of new technology.
among the consumers. The transformation from the traditional
banking to e-banking has been a 'leap' change. This study One of the most utilized model in studying information
determines the factors for the consumer acceptance of internet system acceptance is the technology acceptance model
banking and hence investigates the influence of perceived (TAM) [10]-[13]in which system use (actual behavior) is
usefulness, perceived ease of use, subjective norm, attitude and determined by perceived usefulness (PU) and perceived ease
perceived behavioral control on use of IB among consumers. It of use (PEU) relating to the attitude toward use that relates to
is an essential part of a banks strategy to formulate a model intention and finally to behavior. For studying the acceptance
for popularizing the technology adopted to provide customer
services. Therefore in this study an integration of TAM and of Internet banking, we understand that the original TAM is
TPB is done. Survey based questionnaire design with empirical inadequate because the technology used and the transaction
test was carried out. The results have supported the hypothesis. environment in Internet banking are different from that of
conventional IT and the normal business environment.
Index TermsInternet banking, TAM, TPB, ease of use, Before accepting Internet banking services, users should be
usefulness, subjective norm, attitude. aware about benefits, security issues and the risk associated
with it, which are important. In this regard, we use theory of
planned behavior (TPB) with the addition of two extra
I. INTRODUCTION variables to the model to provide a more comprehensive
The proliferation of, and rapid advances in, technology- theoretical perspective of user technology acceptance in the
based systems, especially those related to the internet, are context of Internet banking. So this study considers the 5
leading to fundamental changes in how companies interact factors perceived usefulness, perceived ease of use,
with customers [1]-[3]. The challenging business process in subjective norm, attitude and perceived behavioral control
the financial services pressurized banks to introduce associated with internet banking.
alternate delivery channel to attract customers and to
improve customersperception. Many banks have
implemented Internet banking to offer their customers a II. INTERNET BANKING
variety of online services with more convenience for
Internet banking is the latest in the series of technological
accessing information and making transactions. Customer
wonders of the recent past. ATMs, Tele-Banking, Internet
satisfaction and customer retention are increasingly
Banking, Credit Cards and Debit Cards have emerged as
developing into key success factors in e-banking [1]. [4]
effective delivery channels for traditional banking products.
stated that the diffusion of Internet Banking is more
Internet or Electronic or online banking is the newest
determined by customer acceptance than by seller offerings.
delivery channel to be offered by retail banks in many
Though customer acceptance is a key driver determining the
developed countries, and there is a wide agreement that this
rate of change in the financial sector, empirical studies on
channel will have a significant impact on the market. Banks
what is holding customers from acceptance of Internet
know that the Internet opens up new horizons for them and
banking have been few [5]. Not enough is known regarding
moves them from local to global frontiers [14]. Internet
how customers perceive and evaluate electronically
banking refers to systems that enable bank customers to get
delivered services. [6] have also recently highlighted the
access to their accounts and general information on bank
need for further research to measure the influence of e-
products and services through the use of banks website,
service on customer-perceived service quality and
without the intervention or inconvenience of sending letters,
satisfaction [2]. While Internet banking has grown rapidly,
faxes, original signatures and telephone confirmations ([15].
there is not enough evidence of its acceptance amongst
In its simplest form, electronic banking may mean the
consumers. [7] reported that half of the people that have
provision of information about the bank and its products via
tried online banking services will not become active users.
a page on the internet [2]. It is the types of services through
Another author claims that Internet banking is not living up
which bank customers can request information and carry out
to the hype [8]. Highly publicized cases involving major
most retail banking services such as balance reporting, inter-
account transfers, bill-payment, etc., via a
Manuscript received June 20, 2012; revised July 12, 2012. telecommunication network without leaving their homes or
R.Safeena, A. Kammani, and N. Hundewale are with College of
Computers and Information Technology, Taif University, Saudi Arabia. (e-
organizations [16],[17],[4],[5]. In essence, it is an electronic
mail: [email protected]) consumer interface and an alternative channel of
H Date is with National Institute of Industrial Engineering, Mumbai, distributions. Online banking has been regarded as the most
India.

DOI: 10.7763/IJCTE.2013.V5.665 146

 International Journal of Computer Theory and Engineering, Vol. 5, No. 1, February 2013

important way to reduce cost and maintain or enhance behavioral control can, together with intention, is used to
services for consumers. It provides universal connection predict behavior. Intention is an indication of a person's
from any location worldwide and is universally accessible readiness to perform a given behavior, and it is considered
from any internet linked computer. It is a process of to be the immediate antecedent of behavior. The intention is
innovation whereby customers handle their own banking based on attitude toward the behavior, subjective norm, and
transactions without visiting bank tellers. perceived behavioral control, with each predictor weighted
Information technology developments in the banking for its importance in relation to the behavior and population
sector have sped up communication and transactions for of interest.
clients. Online banking is also one of the technologies As a general rule, the more favorable the attitude and
which are fastest growing banking practices nowadays. It is subjective norm, and the greater the perceived behavior
vital to extend this new banking feature to clients for control, the stronger should be the individual intend to
maximizing the advantages for both clients and service perform the behavior in question. This theory has been
providers [18]. The Internet has an ever-growing importance widely used in variety of settings including IT acceptance
in the banking sector because of the advantages it brings to research, explain and predict small business
both the entities and their customers. Although information executivesdecisions to adopt IT, in online shopping
system (IS) expenditure is regarded costly and risky research etc.
financial institutions are one of the largest investors in IS
[19]. Internet is the cheapest delivery channel for banking
products as it allows the entity to reduce their branch IV. TECHNOLOGY ACCEPTANCE MODEL (TAM)
networks and downsize the number of service staff. The
navigability of the website is a very important part of The Technology Acceptance Model (TAM) is an
Internet banking because it can become one of the biggest information systems theory that models how users come to
competitive advantages of a financial entity [20]. Bankers accept and use a technology, developed by [10]. TAM is
consider minimizes inconvenience, minimizes cost of one of the most influential extensions of Theory of
transactions and time saving to be important benefits and Reasoned Action (TRA) [23] and the theory of planned
chances of government access, chances of fraud and lack of behavior (TPB) [22], which have long provided useful
information security to be vital risks associated with conceptual frameworks for dealing with the complexities of
electronic banking [21]. Due to increase in technology human social behavior. The main idea of the model is to
usage the banking sectors performance increases day by describe the external factors affecting the internal attitudes
day. Online banking is becoming the indispensable part of and use intentions of the users and, through these, to predict
modern day banking services. Banking industry is also one the acceptance and use of the system. The goal of TAM is to
of the influenced industries adopting technologies which are provide an explanation of the determinants of computer
helpful in providing better services to customers. Quality of acceptance that is general, capable of explaining user
service is improved by using technological innovations. behavior across a broad range of end-user computing
Online banking is time saving [18]. technologies and user populations, while at the same time
being both parsimonious and theoretically justified [24]. It
is a theoretical model that evaluates the effect of system
III. THEORY OF PLANNED BEHAVIOR (TPB) characteristics on user acceptance of computer-based
The Theory of Planned Behavior (TPB) is proposed by information systems [25]. The model suggests that when
Ajzen in 1985 [22] as an extension of the Theory of users are presented with a new technology, a number of
Reasoned Action (which was related to voluntary behavior), factors influence their decision about how and when they
because of the limitations of TRA in dealing with behaviors will use it, notably: perceived usefulness and perceived ease
over which people have incomplete volitional control. The of use. It is one of the most utilized models for studying IS
TPB introduced a third independent determinant of intention, acceptance [26],[27],[10]). TAM involves two primary
perceived behavior control (PBC). TPB is a theory that predictors for the potential adopter perceived usefulness
predicts deliberate behavior, because behavior can be (PU) and perceived ease of use (PEOU) of technology as the
deliberative and planned. Attitude toward a behavior is the main determinants of the attitudes toward a new technology.
degree to which performance of the behavior is positively or According to [10] perceived usefulness is the extent to
negatively valued. It is determined by the total set of which a person believes that using a particular system will
accessible behavioral beliefs linking the behavior to various enhance his or her performance and perceived ease of use is
outcomes and other attributes. Subjective norm is the the extent to which a person believes that using a particular
perceived social pressure to engage or not to engage in a system will be free of effort ".
behavior. Subjective norm is determined by the total set of In general, these theories (TPB and TAM) imply that
accessible normative beliefs concerning the expectations of behavior is determined by the intention to perform the
important referents. Perceived behavioral control refers to behavior. Intention itself is determined by the attitude
people's perceptions of their ability to perform a given towards the behavior. TAMs fundamental construct do not
behavior. Perceived behavioral control is determined by the fully reflect the specific influences of technological and
total set of accessible control beliefs, i.e., beliefs about the usage-context factor that may alter users acceptance; also
presence of factors that may facilitate or impede factors affecting the acceptance of a new IT vary with
performance of the behavior. To the extent that it is an technology, target users and context. As [10] noted that
accurate reflection of actual behavioral control, perceived

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future technology acceptance research needs to address how each statement. Each questionnaire item was scored on a
other variables affect usefulness, ease of use and acceptance. five-point Likert scale (1 = strongly disagree; 2 = disagree;
Hence various technology acceptance models with TAM as 3 = neutral; 4 = agree; and 5 = strongly agree).
base have been evolved. Hence it necessitates a search for
additional factors that better predict the acceptance of IB. VII. ANALYSIS
Out of the variables considered only PU (=0.36, t =
3.087, p < 0:01), PEU (=0.34, t=2.041, p< 0.05),
V. RESEARCH MODEL AND HYPOTHESES ATT(=0.21, t=1.098, p<0.01), SN(=0.24, t=1.43, p<0.01)
Perceived usefulness and perceived ease of use is and PBC(=0.35, t=3.04, p<0.01) are statistically significant,
significant factors affecting acceptance of an information the overall model was also statistically significant (R2
system or new technologies and previous research has = .713, p < 0.001).
empirically found positive relationship between perceived TABLE I: PROFILE OF RESPONDENTS
ease of use and perceived usefulness as critical factors on
Demographic Items No. of respondents Percent
the use of e-banking [28]-[31]. Hence an application
Male 403 73.4
perceived to be useful perceived to be easier to use than Gender
Female 146 26.6
another is more likely to be accepted by users. By applying 21-24 166 30.2
these into online banking context we hypothesize: 24-27 277 41.3
Age group
27-30 121 22.0
H1: Perceived usefulness has a positive effect on >30 035 06.3
intention to adopt and use IB. Bachelors 327 59.6
H2: Perceived ease of use has a positive effect on Qualification
Masters 145 26.4
PhD 013 02.3
intention to adopt and use IB
Other 064 11.6
H3: Attitude has a positive effect on intention to adopt Public sector 198 36.1
and use IB Occupation
Private sector 238 43.4
H4: Subjective norm has a positive effect on intention to Self-employed 098 17.8
Other 015 02.7
adopt and use IB
H5: Perceived behavior control has a positive effect on
TABLE II: RELIABILITY ANALYSIS
intention to adopt and use IB
Reliability for
Determinants No. of items this sample
PU 3 .642
Perceived Usefulness
PEU 3 .797
ATT 5 .692
SN 3 .765
Perceived Ease of Use
PBC 2 .678

Perceived Behavioural Intention to Use IB

Control VIII. DISCUSSION AND FINDINGS

Subjective Norm
This study examines the influence of perceived ease of
use, perceived usefulness, attitude, subjective norm and
perceived behavioral control of Internet banking. As
Attitude expected, the results have supported the hypothesis that PU,
PEU, ATT, SN, PBC have positive effect on the use of
Fig. 1. Research model
Internet banking.
The results of the regression analysis conducted on the
factors indicate that PU, PBC, PEU, SN and ATT on online
VI. RESEARCH METHOD banking were found to be the most influential factors
In order to collect online banking usersinformation, we explaining the use of online banking services. Results show
first required the permission of bank of India to express our that the intention to use online banking is primarily and
need for the information research purposes. Research positively affected by perceived usefulness ( = 0.36) and
questionnaire has been distributed to customers of that bank. less so by Perceived behavioral control ( = 0.35), perceived
A total of 600 questionnaire papers are given randomly. ease of use (=0.34) subjective norms ( = 0.24) and
However those questionnaires that not fill in properly and attitude ( = 0.21).
completely have been taken out. Hence, the actual sample This implies that the perceived usefulness is the most
used for the study is 549 respondents. The questionnaire important predictor of the intention to use online banking.
consisted of two sections. The first section had questions Perceived behavioral control also has a significant impact (
intended to collect respondents demographic profile. The = 0.35) and appears to be the second determinant of a
second section solicited responses about the variables of consumers intention to adopt online banking. Similar
interest in this study: perceived usefulness, perceived ease findings were obtained by [33], who investigated the
of use, attitude, subjective norm, perceived behavioral acceptance of Internet banking in Finland and Hong Kong,
control and intention to use. The respondents rate the respectively. Both studies reached the same conclusion that
questionnaire items by the extent to which they agreed with perceived usefulness is more influential than perceived ease

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of use in explaining the acceptance of online banking. As outcome of the study. This study was conducted to explore
we knew from previous research, perceived usefulness was the factors influencing intentions to adopt Internet banking
always an important determinant of attitude in TAM, and it services. As such, there is still room for further investigation
may mediate the influence of perceived ease of use on into the adoption of Internet banking services. The
attitude. Indeed, perceived ease of use has long been replication of this study on a wider scale with more IB
recognized as a basic requirement for system design customers and with different national cultures is essential
[34],[24]. Another interpretation is that difficulty in using for the further generalization of the findings. By using a
online systems is becoming less of a concern as they are longitudinal study in the future, we could investigate our
increasingly user-friendly. In addition, since online systems research model in different time periods and make
are more common and standardized nowadays, the public comparisons, thus providing more insight into the
has become increasingly competent in using them. phenomenon of online banking adoption.
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