Multivariate analysis of determinants of Internet banking use in European Union countries

Abstract

The main objective of the paper is to analyse the determinants of Internet banking use in European Union countries based on EUROSTAT data for 2011. The considered determinants of Internet banking use are selected in line with relevant theoretical and empirical research and submitted to factor analysis which yielded two factors. The first extracted factor comprises Information and Communication Technology (ICT) infrastructure, i.e. broadband penetration rate and level of Internet access. The second factor comprises individuals’ level of Internet skills and GDP per capita. On the basis of the two mentioned factors, European Union countries are grouped into two clusters using cluster analysis. In order to analyse the impact of selected variables, a multiple regression analysis of Internet banking use is performed using extracted factors as independent variables. The regression analysis shows that an increase in ICT infrastructure leads to an increase in Internet banking use.