Factors affecting the adoption of internet banking: a study in Khulna city, Bangladesh.
Creators: name: Hasan, Md Mehedi
Publisher: name: Zenodo
Year: 2025
Subjects: Adoption
Internet banking (IB)
Innovation Resistance Theory (IRT)
Technostress
Theory of Reasoned Action (TRA)
Theory of Planned Behaviour (TPB)
Technology Acceptance Model (TAM)
The Unified Theory of Acceptance and Use of Technology (UTAUT)

description: Internet banking is gaining popularity worldwide due to its convenience for customers and for the banking industry. It offers an excellent opportunity to shift from time-consuming traditional branch banking to a cost-effective, time-saving banking experience. Additionally, it significantly impacts banks' profit maximisation, customer retention, and the country's overall economic growth. Most importantly, Internet banking is essential for banks to sustain themselves in the competitive banking industry through cost reduction, ensuring the highest customer satisfaction and providing excellent banking service. Despite being an ideal medium of providing and getting banking services, the adoption of Internet banking in Bangladesh is relatively slow compared to other countries. This adoption rate is much lower in rural areas. Different factors individually and collectively are affecting consumers’ adoption of Internetbanking in Bangladesh. Therefore, this study emphasises identifying the factors affecting the adoption of Internet banking in Khulna City, Bangladesh.This study has adopted a mixed methodological approach under a pragmatic research philosophy. A purposive sampling technique has been implemented to collect qualitative data through semi-structured interviews with senior bank employees from seven different banks in Bangladesh at lower to mid-senior levels due to their closeness with customers. Additionally, the researcher used a snowballing sampling technique to collect survey data. A total of two hundred survey responses were collected from the current and dormant Internet banking users from Khulna City, Bangladesh to conduct quantitative analysis. The qualitative data were analysed through thematic analysis, and quantitative data were analysed through descriptive analysis. Finally, triangulation facilitated the validation of data through cross-verification from qualitative and quantitative data sources that enhanced the validity and credibility of the findings.This study highlights how different resisting factors negatively influence customers' decision to adopt Internet banking through the lens of Innovation Resistance Theory (IRT). This study finds that factors associated with culture and local perceptions such as “Complexity Due to Poor English Literacy, Lack of Digital Access and Digital Financial Literacy, Performance Risk, Technostress (Physical Risk), Cash Dependency, Lack of Customer Banker Relationship, Religious Belief, Bad Reputation of Banks” negatively affecting the adoption of Internetbanking. Additionally, factors associated with service infrastructure, including “Slow InternetSpeed and Cost, Segregation of Mobile Financial Service, Difficulties in Setting Up Bank Accounts, Inconvenient Banking Process, Poor Customer Service, and Economic Loss” are acting as resistance factors to Internet banking adoption in Khulna City, Bangladesh. Theserobust findings of this research demonstrate a clear picture of Internet banking adoption barriers in Bangladesh. Therefore, the results of this study will assist customers, banks, and the government in implementing necessary actions to mitigate the problems and it will help to accelerate the process of making digital Bangladesh.Despite illustrating a comprehensive understanding of the problems regarding the adoption of Internet banking in Bangladesh, this study is not free from limitations like any other research. This study is conducted on a single social field within a single country which hinders the findings from being transferable to other fields. Furthermore, travel restrictions due to the COVID-19 pandemic prevented the researcher from obtaining a larger sample size which would enrich the novelty of the research further. However, these limitations haven’t been found to undermine the contributions of this research and its significant contributions to the practice, policy, and research. In addition, it offers a clear and comprehensive understanding of the Internet banking adoption problems to governments, banks, and other financial institutions to mitigate the associated barriers and uplift the growth of Internet banking adoption. Therefore, this study will be an effective roadmap to develop appropriate strategies and formulate the right directions to attract existing and new customers under the umbrella of Internet banking services in Bangladesh.