ONLINE BANKING IN BAHRAIN: ROLE OF ATTITUDES AND BELIEFS IN SHAPING CONSUMER BEHAVIOUR TOWARD ADOPTION

Abstract

ABSTRACT Advances in communication and computer technology and the availability of the Internet have made it possible for people to conduct most of their banking transactions from a remote location, even without having to visit their local branch. With Bahrain's growing reputation as a financial center in the Arabian Gulf region, existing banks face intensive competition from new entrants, making the banking industry in Bahrain more aggressive in developing new online banking services This thesis reports key findings from an empirical study of the Bahraini banking customer's experiences with the adoption of online banking. It provides an understanding of what and how the specific factors influence the decision-making process of the bank customers whether or not to bank on the Internet in the Bahraini context. It uses a theoretical model to examine the intent to adopt online banking services. Using an amalgamated model adapted from two models in the fields of technology research and technology acceptance, this research analyzed the relationships between the intention to adopt online banking services and the attitude toward online banking use, subjective norm toward online banking use, selected user perceptions (perceived usefulness, perceived ease of use, perceived risk, perceived behavioral control), and selected user characteristics (age and income). A questionnaire was used to collect the data for this research, and path analysis was used to analyze the relationships between the proposed model variables. Out of the 13 original model hypotheses, 9 were confirmed. However, the overall model was found to be weak in explaining the relationships regardless of their significance. Furthermore, current non-users were segmented, and a binary logistic regression was used to predict the possibility of future adoption among this segment. It was concluded that about 88% of current non-users are predicted to be future online banking users in Bahrain. In general, the behavioral intention to adopt online banking services in Bahrain was found to be driven primarily by attitudes toward online banking services and customers' perceived behavioral control. The practical and theoretical implications of these findings are discussed. In summary, this research helps to identify perceptions and factors that explain the intention to adopt online banking services. These factors may be important to banks and policymakers who wish to encourage the widespread adoption of online banking services in Bahrain.