Factors affecting the adoption and resistance of electronic banking services by retail customers in Malta

Abstract

Developments in technology have been accelerating at an increasing rate over the past fifty years and have affected every industry, not least among them the banking industry. Nowadays, banking is mostly done through the use of the banks’ electronic channels rather than at their physical branches, although, as this study shows, the latter are still in use and will certainly not be phased out anytime soon. The purpose of this research was to identify the local adoption and resistance factors related to a number of electronic banking services, while at the same time comparing these factors with their global counterparts. In this study, adoption and non-adoption trends within different age groups were analysed in order to get a clearer impression of the suitability of the selected channels in relation to particular age groups. The methods used to carry out this study included both quantitative questionnaires as well as qualitative interviews. The questionnaires were distributed to retail customers in order to get their perspective with regard to adoption and resistance factors for each of the channels; the interviews on the other hand were conducted with representatives of the two major players in the banking industry in Malta, namely HSBC Bank Malta plc. and BOV Bank Malta plc. Interviews were conducted in order to identify adoption and non-adoption factors from the banking managers’ viewpoints. From the analysis conducted in this research, it can be concluded that Malta is by no means unique, as adoption and non-adoption factors are quite similar to the factors noted globally. As a result, Maltese customers also want services which are fast, easy to use, available on a 24/7 basis and, most importantly, secure so as to make it easier for them to adopt e-banking services. This study found out that the factors which most affect Maltese clients’ resistance to certain e-banking services include: lack of trust and security, services which are not customer-friendly enough, a high rate of use of branch services, and also in some cases computer illiteracy. Overall, it was noted that ATMs are the most commonly used channel among all age groups, while phone banking was the least popular one. This study concludes with suggestions to the Maltese banking industry in order to indicate what customers really require in order for them to more easily subscribe to electronic banking channels.