Investigating the Factors Influencing Customers’ Adoption of Online Banking in the United Arab Emirates

INTRODUCTION Purpose of the Research The Internet has offered organizations new and more advanced methods to conduct their business (Kamel, 2001; Karajaluto, Mattila, & Pento, 2002), and one business sector which has been highly affected is the banking sector. The Internet represents a new electronic delivery channel, allowing customers to perform faster and more efficient banking transactions, and offering new methods of reaching new clients (Dannenberg & Kellner, 1998; Sathye, 1999). Online banking is considered a dynamic "value added" method which attracts new customers and eliminates the cost of handling transactions manually in a highly volatile banking environment. It can be considered an easy substitute which reduces the need to visit the physical branch in order to perform banking transactions, offering customers instead the ability to conduct any banking services anyplace and at anytime (Polatoglu & Ekin, 2001; Howcroft, Hamilton, & Hewer, 2002; Fredriksson, 2005; Sayar & Wolfe, 2007). Davis (1989) presented The Technology Acceptance Model (TAM) which is an adaptation of the Theory of Reasoned Action (TRA) (Fishbein & Ajzen, 1975; Ajzen & Fishbein, 1980), but with more focus on user acceptance of information systems (IS). The Technology Acceptance Model is considered an important model when investigating user acceptance of a new information technology (Adams, Nelson, & Todd, 1992; Taylor & Todd, 1995). Hernandez, Jimenez and Martin (2008) demonstrate that the TAM model can properly explain the acceptance level of a new technology in the business context. The success of any information system (IS), especially online banking, is highly determined by user acceptance (Mols, Bukh, & Neilsen, 1999). The TAM posits that perceived ease of use of a technology (PEOU) and perceived usefulness (PU) determine a person's behavior towards the technology. But PEOU and PU are also influenced by exogenous variables, which vary according to the context. Davis (1989) has noted that further research is needed to address how other variables can affect PEOU, and PU. Exogenous variables can be added to the TAM as a way of improving the original model (Davis, Bagozzi, & Warshaw, 1989; Davis, 1993). A key aspect of the TAM, therefore, is to provide a basis for investigating the influence of exogenous factors on endogenous factors of attitudes, and intentions towards any technology including IS. Most applications of the TAM in online banking research have focused on the adoption of online banking in different parts of the world (Jayawardhena & Foley, 2000; Karjaluoto et al., 2002; Chau & Lai, 2003; Wang, Wang, Lin, & Tang, 2003; Pikkarainen, Pikkarainen, Karjaluoto, & Pahnila, 2004; Kolodinsky, Hogarth, & Higlert, 2004; Chan & Lu, 2004; Eriksson, Kaerem, & Nilsson, 2004; Cheng, Lam, & Yeung, 2006; Yiu, Grant, & Edger, 2007; Lee, 2009), while fewer empirical studies have focused on online banking in the Arab world (Aladwani, 2001; Kamel & Hassan, 2003; Jabnoun & Al-Tamimi, (2003); Awamleh & Fernandes, 2005a; Awamleh & Fernandes, 2005b; Awamleh & Fernandes, 2006; Al-Somali, Gholami, & Clegg, 2009). One of the reasons for the limited empirical research in the Arab world is that the introduction of online banking is relatively new to this region. Thus, the goal of this study is to provide a better understanding and knowledge of the antecedents of users' attitude towards online banking in the light of the TAM in the Arab world. This study focuses on the United Arab Emirates (UAE), which is considered one of the leading Arab countries in the advancement of information and communication technology (ICT), and in the number of banks offering online banking services to their customers (Emirates Bank Association, 2007). To date there have been no studies about customers' adoption of online banking in the UAE, with the exception of one study which has investigated the effect of computer self-efficacy and security on users' attitude towards online banking in the UAE (Awamleh & Fernandes, 2005a). …