Factors Relating to the Adoption of Internet Technology by the Omani Banking Industry

The banking industry in Oman is of major importance to Oman’s economy, yet Omani banks continue to conduct most of their transactions using traditional methods. A strong banking industry significantly supports economic development through efficient financial services, and their role in trying to achieve the objectives outlined by the Sultan of Oman will depend heavily on the industry’s capabilities. Omni banks will need to introduce change at both procedural and informational levels that includes moving from traditional distribution channel banking to electronic channel banking. This chapter addresses the question: What are the enablers and the inhibitors of Internet technology adoption in the Omani banking industry compared with those in the Australian banking industry? The chapter does not attempt a direct comparison of the banking industries in these two very different countries, but rather presents a discussion of Internet technology adoption in Oman, informed by the more mature Australian experience. IntroductIon In developed countries such as Australia Internet technologies have been embraced by the banking industry and, for several years, banks have pursued strategies to encourage their clients to engage in Internet banking. In an article relating to on-line banking portals, Ayadi (2007) notes the diversity of competitive, technical and strategic challenges faced by banks on the Internet. In developing countries, financial institutions have been less inclined to adopt Internet technology and thereby capitalize on the benefits of simplicity, convenience and usefulness claimed to be associated with its implementation (Kurihara, Takaya, Harui, & Kamae, 2008). Oman is an example of a developing country committed to economic growth but with a banking industry that is yet to embrace Internet technology. Traditionally, Oman has been heavily reliant on oil as its main income source. Fluctuations in world oil prices, however, can leave the country exposed to commodity price risk and during the 1990s Oman began to diversify its income sources. His Majesty, DOI: 10.4018/978-1-60566-964-9.ch015