Improving the Libyan customers' trust and acceptance for online banking technology

The technology of online banking for customers refers to several types of banking activities through which bank customers can get information and carry out most retail banking services. Libyan banks continue to conduct most of their banking transactions using traditional methods. Given the prevalence of online technology adoption by the banking industry in developed countries, reasons for the lack of such innovation in developing countries such as Libya is of interest in any consideration of technological innovation. The online banking technology usage rate in Libya is at present very minimal, despite the fact that Libya is one of the wealthiest countries in Africa as it is a major oil producer and one of the Europe’s biggest North Africa oil suppliers (Touati, 2008). The Libyan banking industry is now lagging behind and in extreme need of essential change to enhance its banking system, as it has been continuously criticised for its inadequate and inefficient services. Unreliable national telecommunications infrastructure, lack of education between bank customers, lack of technological knowledge among bank staff and customers, and the distance between bank branches and their headquarters were slowing the development of Libyan banking system. These processes require extensive and comprehensive study of online banking related factors in order to achieve customers’ trust and acceptance in online banking technology. The aim of this research is to develop a framework to guide government official for increasing customer trust and acceptance for online banking. After providing literature on online banking, this study considers a framework and tests various factors that might act to determine whether a given technology is likely to be trusted and accepted by the customers of the banking industry in a developing country such as Libya. Data was collected using quantitative and qualitative research methods. The questionnaire survey was distributed to more than 200 Libyan customers of the Bank of Commerce and Development (BCD) and they were analysed quantitatively by descriptive and statistical (correlation and regression) analysis. The data was qualitatively validated with interviews and content analysis. The data was based on customers’ perceptions of factors that might affect their decisions as to whether or not to trust online banking technology in Libya. The study thus addresses the question: How can the level of Libyan bank customers’ trust of online banking be improved? The results of the analysis of this enquiry and findings from a comprehensive literature review enabled the theoretical framework for customers’ trust and acceptance improvement to be developed. As the main outcome of the study, this framework consists of acceptance which includes (relative advantages, ease of use), trust and risk, and online banking issues which includes (security issues, technical and legal support issues, reputation issues, privacy issues, transactional/operation issues). Moreover, technology readiness and demographic characteristics (age, gender) are proposed as having a moderating effect on the relationship between intention and the challenges that might affect customers’ trust and acceptance. These components of the framework have been subject to necessary validation. Thus, if implemented with a conscious effort to address all the mitigating factors, online banking has the potential to bring substantial corporate benefits to both banks and their customers. This research also has significant implications for other research and practical analysis of online banking customers by providing a comprehensive database and established knowledge based on essential theory; this could be used as a resource for practitioners and potential more detailed research, the government officials will also be of interest to the framework for their banking future policies regarding customers’ trust and acceptance. In conclusion, while the aim and objectives of this research were accomplished by providing a framework for the improvement of trust and acceptance of online banking technology by Libyan bank customers, the study has identified the potential limitations of the research and recommendations for future research.