Appraisal of the Constraint of Adoption for E-Banking System in Pakistan

Abstract

Based on the notion of e-Readiness, this research aims to provide a detailed and original explanation of the factors that may affect the adoption of E-Banking, which is the relatively latest variant of conventional banking in Pakistan. This research is designed to evaluate the opportunities and constraints of the E-Banking system and to find the socio-economic determinant of adoption to propose the policy implications to increase the efficiency of the online banking system in Pakistan. The primary data were collected with the help of a well-structured questionnaire and a well-designed survey. A sample of 600 respondents was selected by stratified simple random sampling technique. Collected data was organized and analyzed. The results indicated that family sizes, age of the respondent, education of the respondent, and income of the households were observed as the important socio-economic characteristics of e-banking adoption. The constraints relating to socio-economic, financial, demographic, and technological factors are highly ranked by respondents. Variables related to financial and institutional factors are ranked low as banking is an efficient sector in Pakistan, and a competitive environment ensures the efficacy of the banking system. Results of the probit model showed that Age of Customer education, personal income, working hours, gender, remittances, credit card user, and distance from bank branch.