Factors Influencing the Adoption of Internet Banking In Kenya: A Case of Imperial Bank

A Project Report Submitted to the Chandaria School of Business in Partial Fulfilment of the Requirement for the Degree of Executive Masters in Organizational Development (EMOD)The purpose of this study was to investigate the factors influencing the adoption of internet banking among users using a case of Imperial bank in Kenya. The study was guided by the following research questions: To what extent does the perception of security from hackers increase the utilization of internet banking services among customers? To what extent does the introduction of online banking predict the users’ attitude to adopt of internet banking services? And to what extent do the internet payment arrangements increase the use of internet banking services? This research adopted a descriptive research design. The research population was 4,916 which consisted of 476 employees, 110 corporate and 4,330 retail customers at Imperial Bank in Kenya, using a confidence level of 95%, the sample size was 47 employees, 11 corporate and 433 retail customers. Random sampling techniques were adopted. Structured questionnaires were used as data collection tool. Demographic data were tabulated using frequency and percentages. In order to describe the data, the study used means of each variable. The findings on the perception of security and utilization of internet banking services indicated that customers face a dilemma between desirable and undesirable consequences of the adoption and hence face a risky decision on security. Insufficient trust on financial institutions is a critical perceived credibility issues that lower internet banking acceptance. Customer trust is an essential way to retain existing bank customers as well as encouraging the adoption of internet banking. The findings on the online banking environment and utilization of internet banking revealed that long response time is the criticised transaction risks of internet banking services. The slow response to customers’ online requests is mainly due to the shortage of knowledgeable personnel. The cost and time taken to process an internet banking transaction was short compared to bank branches. Internet banking allows costs saving, increases productivity, improves bank service delivery, customises banking services, and minimises the human errors of the front-desk staffs in performing routine banking. The findings on the internet payment arrangements and the use internet banking services established that web server delays may lead to financial and time loss. Users will have greater confidence in using a simple online service. Internet banking has a clear cost savings goal. This may explain why most consumers may not adopt internet banking because it is expensive. Correct processing of payments may relate with the proper functioning of the internet banking services. Reliability is positively related to the use of internet banking. Therefore, the results on the utilization of internet banking services established that all the customers faced security risks, transaction risks and web server delays may lead to financial and time loss. The study recommends that banks should ensure internet banking security to boost consumer confidence. Internet banking should be trustworthy and secure to avoid undesirable consequences in the face of risky decisions. There should be a fast response time to answer customer queries in relation to internet banking services. Banks should hire well knowledgeable and qualified personnel to answer customer queries. Internet banking websites should be fasters to avoid delay in web browsers for users who may experience financial and time loss. Internet banking should be cheaper for users with a clear cost saving goal for achieving greater confidence in using a simple online service