Impact of trust and risk on internet banking adoption in Armenia

Abstract

This study aims to investigate the Armenian customers’ perception towards internet baking services and identify the main factors that can have impact on the Internet banking adoption process by Armenian customers. The proposed model integrates Trust and Risk as crucial factors that can influence customers’ intention to use Internet banking and also factors from Theory of Reasoned Action (TRA), such as Attitudes and Subjective Norms, and factors from Technology Acceptance Model (TAM), such as Perceived Usefulness and Perceived Ease of Use. The research model is tested using Online Survey and a sample of 387 respondents. To analyze collected data Partial Least Squares (PLS) method was used to understand the impact of each factor on the customers' intention to use Internet banking and Logistic Regression methods was used to understand the main demographic differences between Internet banking users and non-users. The results of PLS analysis indicate that Trust, Attitudes, Perceived Usefulness and Perceived Ease of Use are statistically significant and have positive effect on the customers' intention, but Risk does not have significant effect and, also Subjective Norms have negative effect on the customer’s intention to use Internet banking. As a result of Logistic regression, it is found that Job sector has no effect on customers intention, but Education levels have an impact on the intention to use Internet banking. This study can be helpful for academic readers and students, as well as Bank departments, such as Marketing department and Strategy and research department. It can help banks to understand what kind of concerns customers have toward Internet banking and what are the main barriers in adoption of Internet banking by customers.