Factors Affecting Internet Banking Activities: A Case Study of a Community Bank

This research project investigated the subject of Internet banking activities for a major credit union in California. Community banks have not been the research focus for Internet banking. While large scale banks concentrate on applying information technology to improve their customization, smaller banks have to rely on their mobility, personal touch, and marketing techniques for individual customization. This research identifies the number of Internet banking transactions, the perceived usefulness of Internet banking, and the willingness to use Internet banking as the three aspects of Internet banking phenomenon. A collection of predictor variables including customers’ demographics, accessibility to Internet and computer, and characteristics of transactions, applications, and banks are adopted to explain the Internet banking phenomenon. Multiple regression analyses show that customers who are technicians, married, have higher income, public access to Internet, and Internet accounts perform more Internet banking transactions. In addition, they tend to be concerned about the diversified service banks can provide. Customers who have Internet accounts, and access to Internet from home and public places perceive a higher level of usefulness for Internet banking. As for the willingness to use Internet banking in the future, retirees as a customer segment appear to be a huge untapped market. They tend to be concerned about the types of bank transactions online applications can support and what kind of diversified service banks can provide, but not about the continuous improvement of online applications. This research project serves as a starting point for a systematic study about Internet banking activities for community banks.