An empirical analysis on the socio-demographic factors influencing the adoption of internet banking

Abstract

Technology growth has enhanced the way in which banks offer their services to their customers mainly through internet banking. Internet banking makes it easier for customers to use their services. Given the great benefits of internet banking this study aims to evaluate the effect of socio demographic factors mainly age, gender, education, employment and income on the adoption of internet banking. This is beneficial so that banks can focus on the particular demographic factors and entice consumer who are not aware and reluctant to use the service due to miscommunication. This study sets out to evaluate the relationship by obtaining the data of each demographic factor and internet banking usage from the sample of 30 European Countries in 2014. Subsequently, this data will be evaluated and imputed in the Eviews software where a regression would be run. From these results, the significance of each factor on internet banking usage would be noted. According to the findings of this dissertation, it was found that that income, education and employment are positively related to the adoption of internet banking whereas gender and age are not. These results suggest that internet banking usage in Europe is influenced by high level of educated consumers, consumers with an employment status and those with relatively high standard of living. The dissertation concludes with some recommendations to the banking sector as to what socio demographic factors impacts their service so as to target those particular customers. It is suggested that more education should be given on behalf of banks.