Different Factors Influence the Adoption of E-Banking in India: Challenges and Opportunities

Abstract

Financial sector plays an important role in the development of an economy. A strong banking sector can be termed as lifeline of an economy. Therefore it is not wrong to say that present and future of an economy entirely depends upon the success and development of banking industry of that economy.The Indian economy is on the brink of a major transformation, with several policy initiatives set to be implemented shortly. Positive business sentiments, improved consumer confidence, and more controlled inflation are likely to prop-up the country’s the economic growth. Enhanced spending on infrastructure, speedy implementation of projects and continuation of reforms are expected to provide further impetus to growth. All thesefactors suggest that India’s banking sector is also poised for robust growth as the rapidly growing business would turn to banks for their creditneeds.Also, the advancements in technology have brought the mobile and internet banking services to the fore. The banking sector is laying greater emphasis on providing improved services to their clients and also upgrading their technology infrastructure, in order to enhance the customer’s overall experience as well as give banks a competitive edge.

A recent study on the internet users, conducted by Internet and Mobile Associationof India(IAMAI),foundthatabout23%oftheonlineuserspreferIBasthebankingchannelin India, second to ATM which is preferred by 53%. Out of the 6,365 internet users sampled, 35% use online banking channels in India. Today Indian banking is observing radical changes. In our country, majority of population still lives on rural areas that do not have presence of formal banking and providing banking facility has been a major challenge. Poor education, economies, and infrastructure are obvious factors in the slow adoption of technology. Especially in the banking sector, the adoption and usage of information technology is becoming an essential feature for development. This Study will attempt to analyze the trends of internet banking in India. It becomes challenging for the banks to consider the use of technology to respond to their continuously requirements. The findings of the study concerning on factors affecting the adoption of internet banking in India. This study investigates costumers’ adoption within the context of Indian Internet Banking services.