Customer Adoption of Online Banking: An Application of Diffusion of Innovation Theory in Sri Lanka

Abstract

The primary objective of the current study is to explore the reasons why clients of traditional and Islamic banks services in Sri Lanka in the usage of web based banking through online to do business. The aim of the current exploratory research is to explore the attributes that influence everyone choices about the usage of banking services through online. More research into the linked hypotheses is being conducted using Rogers' model for the diffusion of innovations, which takes into account attributes namely awareness about usage, compatibility, advantages of using online banking services, complexity, risk in uncertainty, and banking online service quality. Respondents of 321 customers of Islamic and other traditional banks in Sri Lanka were given the survey instruments that they were required to fill out on their own for the requirement of the current study, for which a quantitative methodology is used. This was done so that the results of the study could be used to describe both traditional and online banking consumers. According to the findings, the vast majority of bank customers had a far lower level of knowledge than the national average regarding a number of Islamic banking concepts. This study adds to what we already know about how the Internet has helped Islamic banking grow, and it does so in a way that adds to what we already know about how Islamic banking has benefited from the growth of the Internet. A technique known as Partial Least Square Modelling was utilised by the researchers to carry out their analysis of the data. They believed that compatibility would make individuals less inclined to use Islamic banking services, whereas awareness and comprehension, complexity, relative benefit, ambiguity, service quality, and the ability to observe would make people to make use of Islamic banking services. [Citation needed] This article instructs Islamic banks on how to manage their companies and encourage online banking among their clientele. This article offers practical advice and suggestions for the management of Islamic banks, which can be put into practise immediately.