ADOPTION OF INTERNET BANKING IN SRI LANKA: AN EXTENSION TO TECHNOLOGY ACCEPTANCE MODEL

Abstract

This study develops an extended model to predict customer adoption of Internet banking based on the Technology Acceptance Model (TAM) integrating with perceived risks, perceived web site features. In particular, drawing from the perceived risk construct, six specific risk facets; security, privacy, social, time, performance and financial risk synthesized with the construct perceived web site features which has two variables; perceived system quality and perceived information quality which are integrated with the technology acceptance model (TAM) variables; perceived usefulness and perceived ease of use to propose a theoretical model to predict customers’ adoption of Internet banking. An online questionnaire was designed and sent out to Internet banking users in the selected three local commercial banks in Sri Lanka. Respondents participated through extensive personalized e-mail invitations through the selected commercial banks. The extended model is then tested using the data collected and analyzed using multiple- regression. The results indicated that the adoption of Internet banking is positively affected by perceived usefulness, perceived security, perceived social facet, and perceived system quality and those variables were found to be the most influential factors explaining the adoption of Internet banking services. In addition, analysis has revealed that there is a moderated impact on the relationship between the independent variables andendent variable through respondents’ age, income levels and working hours.