Gounaris 2008

International Journal of Bank Marketing
Investigating the drivers of internet banking adoption decision: A comparison of three

alternative frameworks
Spiros Gounaris Christos Koritos
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Spiros Gounaris Christos Koritos, (2008),"Investigating the drivers of internet banking adoption decision",
International Journal of Bank Marketing, Vol. 26 Iss 5 pp. 282 - 304
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IJBM
26,5 Investigating the drivers of
internet banking adoption
decision
282
A comparison of three alternative frameworks
Received August 2007
Revised February 2008
Spiros Gounaris and Christos Koritos
Accepted April 2008 Laboratory of Research in Marketing,
Department of Marketing and Communication,
Athens University of Economics and Business, Athens, Greece

Abstract
Purpose – The paper seeks to compare, through empirical evidence, two widely adopted models (the
Technology Acceptance Model (TAM) and the Diffusion of Innovations (DoI) model) to an underutilized
one (Perceived Characteristics of the Innovation) in order to examine which is better in predicting
consumer adoption of internet banking (IB), while investigating innovation attributes vis-à-vis other
important predictors of adoption of innovations, such as consumer personal characteristics.
Design/methodology/approach – The data derive from both users and non-users of IB through a
web survey. The paper assesses the psychometric properties of the measures through confirmatory
factor analysis and then employs logistic regression analysis in order to assess and compare the ability
of the models to accurately predict consumer adoption of IB.
Findings – The paper finds that PCI performed significantly better than TAM and DoI in predicting
consumer adoption of IB, whereas the addition of consumer demographics and psychographics further
improved the predictive ability of the overall logit model.
Research limitations/implications – Limitations of the study include the non-random nature of
the IB non-users sample, and the fact that this was a study of a single shopping context (i.e. banking).
Non-usability innovation characteristics are important predictors of consumer adoption of
technologically based innovations. Bank managers should reconsider their segmentation and
targeting strategies in the light of more refined as well as new segmentation criteria.
Originality/value – The PCI model has never been examined within online contexts. The paper also
incorporates other non-usability types of characteristics (i.e. social, psychological) into TAM and DoI,
and identifies the moderating role of shopping context, between innovation characteristics and
decision to adopt.
Keywords Virtual banking, Consumer behaviour, Innovation, Decision making
Paper type Research paper
1. Introduction
With the exception of bank branches, internet banking (IB) seems to be the most
successful alternative retail distribution channel in terms of usage rate (Guerrero et al.,
2007). Although ATMs are the second most used distribution channel for withdrawing
money, over the past ten years IB has become the premier banking distribution channel
International Journal of Bank for banking services in many countries (e.g. Fox and Beier, 2006), mainly because IB
Marketing facilitates the acquisition of customers, and improves existing customers’ degree of
Vol. 26 No. 5, 2008
pp. 282-304 loyalty in a cost-efficient manner (e.g. Mols, 2001).
q Emerald Group Publishing Limited Nevertheless, in order to derive the most out of IB, banks must have a good
0265-2323
DOI 10.1108/02652320810894370 understanding of retail customer needs. This understanding goes beyond the design of
banking products and services. It also entails the understanding of the customer’s Drivers of
preference in terms of service delivery systems, because, before a bank can derive the internet banking
potential benefits of IB, a considerable proportion of transactions must shift from
branches to the electronic store (Ding et al., 2007; Eriksson and Nilsson, 2007). adoption
However, this in turn requires a considerable shift in the customer’s transactional
behavior (Lovelock and Wright, 2002).
However, the adoption of IB across Europe is not the same (see Table I). For 283
example, in Greece IB adoption in 2005 was around 2.7 percent of the population aged
18 and above (Hellenic Banks Association, 2005[1]), while PC and internet penetration,
two major antecedents of online shopping and IB (Barbesino et al., 2005; Guillen and
Suarez, 2005), were just a little below the European Union (15 countries) average
(Eurostat, 2007).
2004 2005
Member countries 18 19
Belgium 23
Czech Republic 5 5
Denmark 45 49
Germany 26
Estonia 35 45
Greece 1 1
Spain 12 14
France
Ireland 10 13
Italy 8
Cyprus 4 6
Latvia 12 16
Lithuania 7 10
Luxembourg 35 37
Hungary 3 6
Malta
The Netherlands 50
Austria 18 22
Poland 4 6
Portugal 8 8
Slovenia 9 12
Slovakia 10 10
Finland 50 56
Sweden 40 51
UK 22 27
Candidate counties
Bulgaria 1
Romania 0
Turkey 2
Euro attached countries Table I.
Iceland 54 61 Penetration (percentages)
Norway 55 62 of IB across EU member
and candidate/euro
Source: Eurostat (Information society statistics) attached countries
IJBM In order to explain the consumer’s willingness to change his/her transactional behavior
26,5 and the decision to adopt IB, researchers from marketing and IS alike (e.g. Cheng et al.,
2006; Lai and Li, 2005; Wang et al., 2003) rely mainly on the Technology Acceptance
Model (TAM; Davis et al., 1989). Nevertheless, all these studies concur that the TAM
cannot sufficiently explain the consumer’s decision to adopt IB, probably because the
use of the TAM in the study of IB reflects a focus on the technological aspects of IB
284 adoption but neglects other parameters (e.g. social, psychological) that may also
influence the adoption decision. Two interesting theoretical frameworks that
incorporate such parameters are the five innovation attributes suggested by Rogers
(1962; Diffusion of Innovations – DoI) and its extension the Perceived Characteristics
of the Innovation (PCI) suggested by Moore and Benbasat (1991).
When it comes to the PCI framework in particular, Moore and Benbasat (1991) make
two important theoretical contributions. First, by incorporating the usability attributes

of the TAM, they improve the capability of DoI to capture the numerous
technologically based innovations that seem to grow larger in almost every industry
(Rogers, 1995). Second, by incorporating the social and psychological aspects of
technology acceptance, they extend the TAM in a theoretically meaningful way
(Venkatesh and Davis, 2000, Venkatesh et al., 2003). Hence, PCI is a promising
theoretical framework to better describe more complex innovation adoption
phenomena, such as IB, albeit it has received no attention at all within the online
and in particular IB adoption literature.
Thus, this study attempts to address three research questions. The first research
question pertains to the assessment of the relative ability of the three theoretical
frameworks (TAM, DoI, PCI) in predicting consumers’ adoption of IB. Which of the
three frameworks is better in predicting consumers’ decision to adopt IB? The second
research question pertains to the structure of the PCI framework. Though scant,
empirical evidence (Plouffe et al., 2001; Venkatesh et al., 2003) suggest that not all the
parameters that have been suggested as necessary complements of the PCI framework
are significant predictors of the decision to adopt an innovation. Thus, does PCI need to
be reassessed in terms of parameters composition, in order to become more appropriate
for the study of technologically based innovative distribution channels within the
financial services industry? The third research question pertains to the effect that
specific consumer personal characteristics (demographic and psychographic) have in
further improving our understanding of consumers’ decision to adopt an innovative
distribution channel within the financial services industry.
Answering these research questions can result in several significant contributions.
To begin with, based on empirical examination, this is the first study to report on the
suitability of three well established frameworks, in explaining the adoption decision of
a technologically based innovative distribution channel within the financial services
industry. Furthermore, by identifying the relevant – in terms of predictive power –
dimensions of the alternative frameworks under investigation, the present study
equips future researchers in relevant studies (technologically based innovations in
financial services) with both an effective and parsimonious framework.
This study intends to make a contribution for practitioners too. The study seeks to
offer banks a deeper and clearer insight into consumers’ adoption decision, which in
turn will allow them to fine-tune their marketing efforts in order to increase the volume
of transactions over IB. Finally, the study seeks to make a contribution to practitioners
by clarifying whether or not it is necessary to use complex research instruments in Drivers of
order to evaluate the probability of adopting a technologically based innovative internet banking
distribution channel.
The remainder of the text is organized as follows. First we review the existing adoption
literature in order to substantiate specific research hypotheses. Then, we present the
methodology of our study, followed by presentation of the analysis of the data
collected. The last two sections of the manuscript cover discussion of the findings and 285
the research’s limitations, as well as some interesting directions for future research.
2. Literature review and research hypotheses

2.1 The Diffusion of Innovations Theory (DoI)
Rogers’ (1962) pioneering work in the adoption of innovations led to the development of
the Diffusion of Innovations theory (DoI). According to this theory, the decision to
adopt an innovation depends on, among other things, the perceptions of the members
of a social system regarding five specific attributes of the innovation in question,
namely:
(1) relative advantage, i.e. the degree to which the innovation is perceived to be
better than what it supersedes;
(2) compatibility, i.e. the degree to which the innovation is perceived to be
consistent with existing values, past experiences and needs;
(3) complexity, i.e. the degree to which the innovation is perceived to be difficult to
understand and use;
(4) trialability, i.e. the degree to which the innovation can be experimented with on
a limited basis; and
(5) observability, the degree to which one can see and understand the results of
adopting the innovation before the full adoption.
According to Rogers (1962), perceptions regarding those five attributes represent

reliable predictors of innovation adoption and diffusion. Indeed, various studies since
the DoI framework was originally introduced have shown that the framework is
superior to other predictors of the adoption decision, such as the demographic profile of
the consumers (e.g. Dickerson and Gentry, 1983; Holak, 1988; Labay and Kinnear, 1981;
Lancaster and Taylor, 1988; Ostlund, 1974).
2.2 The Technology Acceptance Model (TAM)

Driven by a very different motivation, and having a much narrower perspective in
mind compared to that of Rogers (1962), Davis (1989) sought to understand the drivers
of technology acceptance by studying, primarily, potential users of hardware/software
technologies within an organizational contexts. Based on the well-known Theory of
Reasoned Action (TRA; Fishbein and Ajzen, 1975), Davis (1989) proposed the
Technology Acceptance Model (TAM) which incorporates the attitude ! intention !
behavior relationship depicted in the TRA.
To make the assessment of intention/behavior more valid for a technologically
based context, Davis (1989) suggested two beliefs as the key factors influencing
attitude creation towards adoption of a technologically based innovation. These are:
IJBM (1) perceived usefulness, which captures potential users’ perceptions regarding the
26,5 benefits that will stem from adopting a technologically based application; and
(2) perceived ease of use, which captures potential users’ perceptions regarding the
difficulties of learning and using a technologically based application,
Working further on the basis of TAM, Venkatesh and Davis (2000) explored the
286 possibility to improve the explanatory power of Davis’s (1989) model and enrich it with
three additional beliefs (TAM2), namely:
.
voluntariness, capturing the degree to which potential users perceive the
acceptance of a technologically based innovation as compulsory/optional;
.
image, capturing the degree to which potential users perceive the usage of a
technologically based innovation as adding prestige to their social icon; and
.
result demonstrability, capturing the degree to which potential users perceive as
being easy to demonstrate to others the results of using a specific technologically
based innovation.
2.3 The Perceived Characteristics of the Innovation (PCI)

In a recent appreciation of the status of frameworks developed within the IS field,
Orlikowski and Iacono (2001) have depicted many theoretical constructs (including
TAM) as “black boxed” and abstracted from aspects other than the technological ones,
which may be the main concern for the medium predictive ability of the TAM (King
and He, 2006; Legris et al., 2003; Ma and Liu, 2004). In fact, recent research efforts
attempt to remedy this emphasis on the usability aspects of technology acceptance by
considering social and psychological factors, which are proved important predictors of
the decision to adopt/accept a technologically based innovation (Konana and
Balasubramanian, 2005; Venkatesh et al., 2003).
An exciting and empirically validated framework that does not focus only on the
usability aspects of a technologically based innovation is the Perceived Characteristics of
the Innovation (PCI) framework (Moore and Benbasat, 1991). Having considered the DoI
and TAM frameworks, the authors identified various issues needing reconsideration and
improvement. For instance, relative advantage and complexity coincide conceptually
with perceived usefulness and perceived ease of use (Moore and Benbasat, 1991).
Furthermore, observability in the DoI framework is actually comprised of two
dimensions, namely visibility (i.e. the degree to which one can identify those who have
already adopted and used the innovation), and result demonstrability (Moore and
Benbasat, 1991). Moreover, adoption of an innovation is a socially embedded
phenomenon, characterized by social-type assessments that lead to changes in the
social image/status of adopters (Rogers, 1962). Finally, because the adoption of
innovations, particularly in work contexts, may be compulsory, the perceived degree of
voluntariness of the adoption will have a direct positive effect on the adoption decision
(Moore and Benbasat, 1991).
Moore and Benbasat (1991) incorporated these interrelations between the
aforementioned drivers of innovation adoption in a unified comprehensive
framework (PCI) that consists of eight parameters:
(1) relative advantage (usefulness);
(2) ease of use (complexity);
(3) compatibility; Drivers of
(4) trialability; internet banking
(5) result demonstrability; adoption
(6) visibility;
(7) image; and
(8) voluntariness. 287
Furthermore, PCI has been validated by a number of research studies (Agarwal and
Prasad, 1997; Karahanna et al., 1999; Moore and Benbasat, 1996; Plouffe et al., 2001;
Venkatesh et al., 2003).
PCI incorporates not only the usability/economic aspects of technology adoption
(relative advantage, ease of use, compatibility) but also the social (image, visibility,
result demonstrability) as well as psychological ones (voluntariness, trialability)
(Moore and Benbasat, 1991; Rogers, 1962). Interestingly enough, although clearly PCI
does not represent an innovative framework for decoding the decision to adopt an
innovation, it makes a significant contribution in the relevant literature by augmenting
the antecedents of the adoption decision in a manner that allows deriving a broader,
not solely technology oriented, insight of the topic under study. In fact, Rogers (1995),
concedes the merits and the contributions of the PCI framework.
2.4 Research hypotheses (PCI)

According to Bitner (1992), service delivery systems consist of two main types of
stimuli, namely the interactions among consumers themselves, and that of consumers
and service employees, as well as a number of other non-social but more functional
stimuli (e.g. signage, branch layout, ATMs). The combination of these stimuli, coupled
with the perceptual, psychological and physiological states of the consumers during
the service delivery process, lead to specific behaviours. Nevertheless, service delivery
systems vary in terms of stimuli presence and intensity (Bitner, 1992). Thus, service
delivery systems may be more or less “rich/lean” in terms of consumer stimulation.
The richness of the stimulation the customer receives from the delivery system
affects consumer’s perception about the system (Mehrabian and Russell, 1974).
Research in online shopping contexts has shown that the infusion of stimuli such as
avatars (human-like images interacting with site visitors in order to provide them with
help), enhance both the social and the psychological aspects of the shopping process,
and influence the consumer’s online shopping behaviour (e.g. Holzwarth et al., 2006;
Lingyun and Benbasat, 2005; Wang et al., 2007). Consequently, an exclusive focus on
the role of usability attributes of the service delivery systems (i.e. usefulness and ease
of use) may constitute an under-representation of the phenomenon under study.
When it comes to IB in particular, a large number of researchers employ TAM in
order to investigate IB adoption, but with little success. For example, Chan and Lu
(2004) found in a study of Hong Kong banks that subjective norms and computer
self-efficacy had a significant effect on intentions to adopt IB, whereas perceived ease
of use had only an indirect significant effect on intention to adopt IB, through perceived
usefulness.
Other studies (e.g. Chau and Lai, 2003; Eriksson et al., 2005; Suh and Han, 2002)
report similar results. Only a recent study by McKechnie et al. (2006) reports findings
IJBM supporting the TAM framework but, even in this case, the authors suggest that
26,5 additional parameters are required before we can derive a sound understanding of the
factors influencing the bank customers’ decision to adopt IB. Table II reports various
previous research efforts that attempted to do this.
Although the inclusion of additional parameters that have significant effects on the
dependent variables (e.g. adoption decision) may increase the explanatory power of a
288 model, this does not warrant a theoretical contribution, unless the researcher has
sufficiently substantiated the relationship and all combined effects among these
variables and the construct they supposedly underlie (Shugan, 2006).
In contrast the three frameworks that we consider (DoI, TAM, PCI) are all well
substantiated from a theoretical perspective. Although PCI has not yet been employed
in predicting consumers’ decision to adopt IB, the evidence we presented earlier depicts
the medium performance of TAM in doing so, a typical finding of research in online
shopping behaviour (King and He, 2006). Furthermore, two studies (Plouffe et al., 2001;
Venkatesh et al., 2003) that have compared TAM and PCI in offline contexts show that
PCI outperform TAM at predicting adoption of innovations.
On the other hand the lack of a technology focus in the DoI framework and the need
to disintegrate observability (Moore and Benbasat, 1991) cast doubt on the ability of
DoI to outperform the other two frameworks in terms of predictive accuracy. On these
grounds we test the following hypothesis:
H1. PCI outperforms TAM and DoI regarding the accuracy of predicting
consumers’ adoption of IB.
In studying the role of the characteristics comprising each of the three models across
research studies examining the adoption of several innovations, an observation
applicable to all three can be made: the impact of characteristics varies considerably
across studies. According to meta-analytic studies of TAM within online contexts
(King and He, 2006; Legris et al., 2003; Ma and Liu, 2004), the impact of both ease of use
and usefulness vary considerably.
Study Variables
Suh and Han (2002) Trust

Wang et al. (2003) Self-efficacy, system credibility
Chau and Lai (2003) Personalization, alliance services, task familiarity, accessibility
Pikkarainen et al. (2004) Enjoyment, product information, security and privacy, connection to
the Internet
Chan and Lu (2004) Self-efficacy, risk
Lassar et al. (2005) Innovativeness, computer/internet self-efficacy, internet usage,
demographics
Curran and Meuter (2005) Need for interaction, risk
Table II. Eriksson et al. (2005) Demographics
Additional variables Lai and Li (2005) Demographics
employed in IB research McKechnie et al. (2006) Product category involvement, experience with internet technology,
studies utilizing TAM as demographics
their main research Cheng et al. (2006) Security
framework Guriting and Ndubisi (2006) Self-efficacy, internet usage, demographics
Similarly, the meta-analysis by Tornatzky and Klein (1982) regarding DoI showed that Drivers of
not all five attributes were significant across a sample of 75 studies that used this internet banking
framework. The same is also true for the PCI framework, despite the small number of
empirical studies that use it (Plouffe et al., 2001; Venkatesh et al., 2003). Parsimony adoption
refers to the adoption of the simplest possible way in order to explain a phenomenon
(Wacker, 1998), and the application of all three frameworks in different empirical
studies demonstrate that several dimensions appear to be redundant. On these grounds 289
we suggest that:
H2. The factorial validity of PCI needs to be reconsidered in order to improve the
parsimony of the framework.
Given the low explanatory power of TAM and DoI, researchers have been led to
investigate the possibility of improving the explanatory power by introducing the

consumer demographic profile in the analysis (e.g. Eriksson et al., 2005; Guriting and
Ndubisi, 2006, Lai and Li, 2005; Lassar et al., 2005; McKechnie et al., 2006). However,
the results from these studies are conflicting with regards to the significance of the role
of demographics on consumers’ decision to adopt IB. This is not an entirely surprising
finding, particularly so when considering the significant differences in the
demographic profile of IB users across countries (see Table III).
Also, it is worth noting that previous studies regarding the diffusion of innovations
(e.g. Dickerson and Gentry, 1983; Ostlund, 1974; Gatignon and Robertson, 1985) have
shown that consumer demographics do not have a marked effect on the prediction of the
decision to adopt an innovation. Furthermore, as the innovation diffuses beyond the initial
adoption groups (i.e. innovators and early adopters), the ability to distinguish adopters
from non-adopters based on their demographic profile becomes very difficult (Assael,
2005; Rogers, 1962, 2003). On these grounds we examine the following hypothesis:
H3. Consumers’ demographic characteristics will not significantly improve the
predictive power of PCI.
Eriksson et al. Guriting and Ndubisi Lassar et al. Present study

(2005) (2006) (2005) (2006)
Country Estonia Malaysia USA Greece

Gender Male 44.0 47.4 40.4 83.9
Female 56.0 52.6 59.5 16.1
Age , 25 25.1 3.0 54.5 7.3

25-35 20.4 26.3 23.2 47.7
36-45 21.2 39.8 18.3 30.6
46-55 19.3 25.6 4.0 11.5
. 56 13.9 5.3 2.9
Education Primary-secondary 25.1 52.7 11.6

College/professional 28.0 9.3 10.2 Table III.
Undergraduate 42.2 36.8 33.3 45.7 Comparison (percent) of
Postgraduate 4.8 10.5 57.4 32.5 basic demographic
variables across studies
Note: Due to large wage discrepancies among countries, income is not included in the comparison examining IB adoption
IJBM In contrast, there is compelling evidence that substantiate the importance of
26,5 consumers’ psychographic characteristics as predictors of the decision to adopt IB or
not. For instance, in the study of Lassar et al. (2005), researchers found that
innovativeness significantly improved the predictive power of their model. Mäenpää
et al. (2006) also report similar results by using shopping orientation. On these grounds
we examine the following hypothesis:
290 H4. Consumer psychographic characteristics (innovativeness and shopping
orientation) will significantly improve the predictive power of PCI.
3. Methodology
3.1 Sample selection
Innovations such as IB are directed to a large number of consumers. Diffusion of

innovations across time, follow a standard deviation-curve (Rogers, 1962). Consequently,
the first to adopt the innovation are the innovators (approximately 2.5 percent), followed
by the early adopters (13.5 percent). Next, the early (approximately 34 percent) and the
late (approximately 34 percent) majority constitute the bulkier adoption category,
whereas laggards (approximately 16 percent) are the last to adopt the innovation, while it
is possible that some consumers will never adopt the innovation.
While almost every bank in Greece offers IB, at least on a retail basis, at the
time this study took place there were approximately 226,000 customers with an
active IB subscription, consisting of 2.74 percent of the Greek population over 18
(Hellenic Banks Association, 2005). This figure shows that IB users in Greece are
mainly from the innovators group, plus a small part from the early adopters group
(Rogers, 1962).
On the other hand, it is also interesting to note that approximately 31 percent of
Greeks use the internet for a variety of reasons (Ministry of Development, 2006). This
means that a large percentage of internet users do not use IB, either for seeking
information on bank products and services or for bank transactions, despite the greater
expected probability that these individuals would have made greater use of IB because
of their computer/internet literacy (Barbesino et al., 2005; Chon, 2001; Demoussis and
Giannakopoulos, 2006; Guerrero et al., 2007; Guillen and Suarez, 2005).
On these grounds, we defined the population for this study to be all Greek internet
users, and in order to examine our research hypotheses, we draw two samples:
(1) Sample A: IB users, subscribers to the IB system of at least one bank; and
(2) Sample B: non-IB users, users of the internet who have never used IB.
In the absence of a reliable sample frame, to identify sample units for Sample A, we
contacted the four leading banks in Greece, jointly comprising 73 percent (or 165,000
customers) of all Greek IB users, and asked them to place a link to a web-based
questionnaire at the login page of their IB system. The banks’ officials agreed and
invited their customers to participate in our study. With regards to Sample B, the lack
of a sample frame compelled us to seek an alternative. Thus, through e-mail, we
contacted 1,085 postgraduate students in business and management who use the
internet but who had no previous experience of IB, informing them about the purpose
of the research, and asking them to fill in the web-based questionnaire (similar to the
one for IB users).
3.2 Measurement instrument and validation Drivers of
To measure the perceptions of the eight innovation characteristics for both IB users internet banking
and non-users, we employed the scale developed by Moore and Benbasat (1991),
anchored on a seven-point Likert scale ranging from strongly disagree (1) to strongly adoption
agree (7) (see the Appendix). The assessment of the factorial validity and the
psychometric properties of PCI was based on a three-stage process. In the first stage,
PCI was submitted to a confirmatory factor analysis (CFA) using AMOS 7.0 (Arbuckle, 291
2006). To do this, we randomly split the sample of IB users (Sample A: n ¼ 858) into
two halves and used the first sub-sample (n1 ¼ 429) in order to explore the optimum
factorial validity of the framework. CFA showed that five items had quite low loadings
(see second column of Table IV). After eliminating these items, both the factor loadings
and the psychometric properties of the revised framework improved significantly (see
third column of Table IV).

The second stage of the assessment process aimed at confirming the modified
structure of PCI resulting from the previous exploratory in nature CFA (Schumacker
and Lomax, 2004). The modified framework was exposed to a second CFA that we ran
in the second sub-sample of IB users (n2 ¼ 429). Results confirm both the factorial
structure and the psychometric properties of the modified framework (see fourth
column of Table IV).
Finally, in order to examine the external validity of the modified framework, a third
CFA using the sample of IB non-users (Sample B: n ¼ 418) was performed. The
significant differences of the two samples (A and B) (see Table V), in terms of
demographic profile and perceptions of innovation characteristics, legitimize this
analysis, and provide strong evidence for the validity of the measurement instrument
(e.g. DeVellis, 2003). Indeed, results of this final CFA confirmed, once more, both the
factorial structure and the psychometric properties of the modified framework (see fifth
column in Table IV).
To complete the psychometric assessment of the PCI we calculated[2] composite
reliabilities and AVE for the eight dimension of the framework (see Table VI). All
dimensions performed above the recommended cutoff values[3] (Fornell and Larcker,
1981). Finally, tests of convergent and discriminant validity show that the eight PCI
dimensions possess sound psychometric properties.
4. Data analysis
In order to test the two research hypotheses of the present study, we employed
hierarchical logistic regression analysis, following Field’s (2006, p. 227) suggestions. The
backward likelihood ratio estimation method was selected in every stage of the analysis.
The first research hypothesis suggests that PCI achieves better results in predicting
consumer adoption of IB compared to TAM and DoI. Logistic regression offers three
criteria for assessing the relative predictability of models incorporating a number of
different predictor variables (Field, 2006; Hair et al., 2006; Tabachnick and Fidell, 2001).
The first criterion is the existence of a significant increase/decrease in
2 2 log-likelihood[4], from the model with the more/fewer variables to the model
with the fewer/more variables. The second criterion is that any changes in the size of
the R 2-like measures (R2L , Cox and Snell R 2, Nagelkerke R 2) may derive by the
addition or removal of certain variables. The last criterion is that the improvement or
deterioration of the classification results derives from the addition or removal of certain
IJBM
Original Purified
26,5 framework (based framework (based First validation
on the first on the first (based on the Second validation
subsample of subsample of second subsample (based on the IB
Sample IB users) IB-users) of IB users) non-users sample)
292 Goodness of fit statistics (Hu and Bentler, 1999)

x2 890.58 478.06 459.61 561.19
df 296 179 179 179
p 0.000 0.000 0.000 0.000
GFI 0.87 0.91 0.91 0.90
CFI 0.82 0.90 0.90 0.90
RMSEA 0.07 0.06 0.06 0.06
Loadings
comp1 0.81 0.81 0.98 0.89
comp2 0.83 0.84 0.72 0.78
comp3 0.16
eu1 0.67 0.67 0.68 0.67
eu2 0.69 0.69 0.70 0.83
eu3 0.93 0.93 0.86 0.90
im1 0.65 0.65 0.64 0.68
im2 0.80 0.79 0.74 0.82
im3 0.69 0.69 0.66 0.71
ra1 0.60 0.57 0.56 0.54
ra2 0.64 0.60 0.60 0.78
ra3 0.76 0.80 0.77 0.85
ra4 0.57 0.48 0.51 0.60
ra5 0.54 0.56 0.52 0.72
rd1 0.70 0.71 0.58 0.81
rd2 0.33
rd3 0.77 0.76 0.68 0.63
try1 0.52 0.50 0.50 0.75
try2 0.31
try3 0.64 0.65 0.49 0.64
try4 0.66 0.66 0.71 0.58
vol1 0.36 0.40 0.45 0.36
vol2 0.50 0.72 0.65 0.56
vol3 0.44
Table IV. vs1 0.16
Results of framework vs2 0.88 0.88 0.90 0.93
(PCI) assessment vs3 0.84 0.84 0.83 0.82
variables. All three criteria were used in the present study in order to assess the
relative predictability of the three models.
More specifically, in the hierarchical logistic regression analysis we performed, IB
usage[5] is the dependent variable. In the first step of the analysis, we used the two
dimensions of TAM (relative advantage and ease of use) as the independent variables
of the baseline model. In the second step of the analysis, we added four more
innovation characteristics (compatibility, visibility, trialability and result
demonstrability), which together with the two dimensions of TAM constitute the
Drivers of
Users Non-users ICT
internet banking
Sex adoption
Female 16.1 38.4 35.4
Male 83.9 61.6 64.6
Age (years) 293

18-24 7.3 34.9 37.1
25-34 47.7 30.1 29.2
35-44 30.6 20.5 19.1
45-54 11.5 11.2 10.6
55-64 2.3 3.3 3.1
More than 65 0.6 0.0 0.9
Education
Elementary 11.6 1.6 1.2
Professional 10.2 27.1 24.6
Undergraduate 45.7 21.7 74.2a
Graduate 32.5 49.6
Occupation
Self-employed 34.9 12.0 13.1
Public sector 17.4 10.6 9.2
Private sector 38.3 51.5 49.2
Unemployed 0.4 1.4 1.1
Retired 2.8 0.0 0.9
Housekeeping 0.1 0.6 0.7
Student 6.0 24.0 25.8
Monthly personal income (e)

Up to 500 0.8 3.3 4.5
500-900 10.7 31.7 33.6
900-1,500 24.9 38.1 39.1
1,500-2,000 19.0 19.2 16.3
More than 2,000 44.7 7.6 6.5
Innovativeness (means) 6.25 5.51 NA
Shopping orientation (means)

Economic 6.09 2.29 NA
recreational 4.38 5.12 NA
Innovation attributes (means)

Relative advantage 6.39 4.85 NA
Ease of use 6.19 4.74 NA
Compatibility 5.63 4.68 NA
Result demonstrability 5.71 4.83 NA
Image 3.96 3.56 NA
Visibility 3.75 3.18 NA Table V.
Voluntariness 6.32 6.03 NA Composition of consumer
Trialability 4.65 4.06 NA personal characteristics
(percentages) and
Note: The Annual National Survey of ICT Usage considers undergraduate and postgraduate innovation attributes
education as belonging to the same highest educational level means
IJBM DoI framework. Finally, in the third step of the hierarchical logistic regression, we
26,5 added two more characteristics (image, voluntariness), which together with the six
characteristics of TAM-DoI frameworks incorporated in the analysis during the
previous two steps, comprise the PCI framework. Table VII summarizes the results.
As Table VII shows, according to the first criterion (significant reduction of
2 2 log-likelihood), PCI performs significantly better than both the TAM and DoI. In
294 fact, based on 2 2LL criterion, there was no significant improvement when we added
the four characteristics of DoI to the two dimensions of TAM. Using all three R 2-like
criteria, PCI performs better than TAM and DoI. Finally, the third criterion, which is
based on the prediction accuracy, confirms the superiority of PCI over TAM and DoI.
These results lend full support to H1.
As can be seen in Table VII (second column), although PCI outperforms TAM and
DoI in terms of predictive validity, this should be attributed to four out of the eight
characteristics comprising PCI. In fact, apart form the two TAM characteristics (i.e. ease
of use and usefulness) only image and voluntariness (the two characteristics added by
Moore and Benbasat, 1991), are responsible for the improved performance of PCI.
This means that while the global structure of PCI (i.e. utilitarian, social, psychological)
is confirmed, the subconstructs comprising this structure need to be reconceptualised in
order to validly reflect adoption of innovative distribution channels in financial services
industry, lending full support to H2. More specifically, as the data analysis reveal, while
ease of use and usefulness are significant utilitarian predictors of IB adoption,
Compatibility, which Rogers (1962) presents as directly affecting utility perceptions of
potential adopters, has no significant effect. Similarly, while both voluntariness and
trialibility are important psychological risk relievers when adoption of an innovation is
considered (Moore and Benbasat, 1991; Rogers, 1962), only the former has a significant
predicting effect. Finally, although visibility, result demonstrability and image are all
considered to reflect the social aspect of innovation adoption (Agarwal and Prasad, 1997;
Karahanna et al., 1999; Moore and Benbasat, 1991; Venkatesh and Davis, 2000), in the
context of IB, only the latter proved a significant predictor.
Next, we move onto the examination of H3, which suggests that the addition of
consumer demographics does not significantly improve the predictability of the PCI
model. Again we employ hierarchical logistic regression analysis with backward
likelihood ratio estimation. The PCI logit model incorporating the eight characteristics
of the innovation suggested by Moore and Benbasat (1991) becomes the baseline model
for this analysis. Table VII displays the results of the analysis.
Crombach’s Uni- Composite Convergent Discriminant

Dimension a dimensionality reliability AVE validity validity
Compatibility 0.81 U 0.71 0.59 U U

Ease of use 0.80 U 0.87 0.70 U U
Image 0.76 U 0.68 0.55 U U
Relative advantage 0.74 U 0.88 0.60 U U
Table VI. Result demonstrability 0.70 U 0.69 0.53 U U
Psychometric properties Trialability 0.73 U 0.69 0.58 U U
of the framework (PCI) Voluntariness 0.71 U 0.73 0.67 U U
dimensions Visibility 0.85 U 0.72 0.57 U U
Classification accuracy
Log likelihood criterion R 2-like criteria criterion
Cox and Nagelkerke Overall classification
Model Variables 22LLD 2 2LL df Ddf p R2L Snell R 2 R2 results (percent)
(1) Constanta CON 1,562.786 1 67.2

(2) TAMa RA *, EU *, CON 896.289 2 0.426 0.417 0.581 84.4
(1)-(2)a 666.497 1 0.000
(3) DoIa RA *, EU *, CON 892.909 3 0.429 0.419 0.583 84.2
(2)-(3)a 3.380 1 NS
(4) PCIa RA *, EU *, IM *, VOL *, CON 869.687 5 0.444 0.429 0.598 85.0
(3)-(4)a 23.222 2 0.000
(5) Demographicsb RA *, EU *, IM *, VOL *, GEN *,

AGE *, EDU *, OCU *, CON 702.028 9 0.551 0.502 0.699 88.3
(4)-(5)b 167.658 4 0.000
(6) Psychographicsb RA *, EU *, IM *, VOL *, GEN *,

AGE *, EDU *, OCU *, INO *,
SHOR *, CON 617.142 12 0.605 0.535 0.745 90.0
(5)-(6)b 84.886 2 0.000
Notes: CON (constant), RA (relative advantage), EU (ease of use), IM (image), VOL (voluntariness), GEN (gender), AGE (age), EDU (education), OCU
(occupation), INO (innovativeness), SHOR (shopping orientation). aTesting H1 and H2; btesting H3 and H4; *denotes significant (, 0.05) predictors of IB
adoption in the hierarchical logit models
internet banking
demographic/
Comparative assessment
adoption
(TAM, DoI, PCI) and
psychographic variables
of the three models
Table VII.
295
Drivers of
IJBM The addition of demographic characteristics on the innovation attributes resulted in a
26,5 significant decrease of the 2 2LL, whereas both the R 2-like criteria and the
classification criteria showed a marked improvement. These results completely refute
H3. This improvement increased even more when we added the two psychographic
characteristics (innovativeness and shopping orientation) to the logit model (Table VII).
In fact, the addition of psychographics significantly improved the performance of the
296 model, which, apart from the innovation attributes, included consumer demographic
characteristics. Thus, H4 is fully supported.
Table VIII presents the logit model of the factors with a significant effect on the
adoption of IB. Based on the b values it appears that nine variables have a positive
effect on the odds of a person belonging to the IB users, whereas two variables
(italicized rows in Table VIII) have a negative effect. More specifically, it appears that
the odds of a consumer with a college education being an IB user are nearly eight times
(expðBÞ ¼ 7:672) higher than those of a consumer with only an elementary education,
which is equal to an increase of 667 percent in odds. Furthermore, the odds of a worker
within the private sector being an IB user are four times (expðBÞ ¼ 4:063) higher than
those of a self-employed consumer, which is equal to an increase of 306 percent in odds.
Similarly, male and more innovative consumers have greater odds of being IB users
than female and less innovative ones. While consumers who perceive more relative
advantages in IB and its rather straightforward use have significantly higher odds to
actually adopt IB. Likewise it is more likely that consumers will adopt IB, if the bank
allows them to do so at their own pace (voluntariness), and, also, if they perceive that in
doing so they enhance their image.
5. Discussion
Over the last 20 years, scholarly attempts at trying to predict the adoption of a
technologically based innovation have relied mainly on the TAM framework, with
medium explanatory results regarding the innovation adoption decision (e.g. Lederer
et al., 2000; Schepers and Wetzels, 2007; Venkatesh and Davis, 2000; Venkatesh et al.,
2003; Yousafzai et al., 2007).
Oddsa
change
B SE Wald df Sig. exp(B) (percent)
College versus elementary 2.038 0.586 12.108 1 0.001 7.672 667

Private sector versus self-employed 1.402 0.460 9.297 1 0.002 4.063 306
Undergraduate versus elementary 1.176 0.467 6.342 1 0.012 3.241 224
Public sector versus self-employed 1.144 0.500 5.228 1 0.022 3.139 214
Relative advantage 1.019 0.161 40.088 1 0.000 2.772 177
Innovativeness 0.708 0.106 44.756 1 0.000 2.030 103
Voluntariness 0.672 0.097 32.345 1 0.000 1.972 97
Ease of use 0.524 0.141 13.768 1 0.000 1.689 69
Image 0.420 0.083 9.990 1 0.003 1.647 64
Experiential shopper 2 0.392 0.096 16.811 1 0.000 0.675 2 32
Female versus male 2 1.523 0.224 46.204 1 0.000 0.218 2 78
Table VIII. Constant 4.997 10,776.316 0.000 1 1.000 147.926
Variables in the final logit
model Note: aThe exponential coefficient minus 1, times 100, equals the percentage change in odds
In response to this situation, various studies have attempted to enrich the TAM Drivers of
framework with additional parameters, but such efforts have little contribution unless internet banking
grounded on a robust theoretical basis (Shugan, 2006). The Perceived Characteristics of
Innovations framework (Moore and Benbasat, 1991) represents an alternative adoption
conceptualization with a robust theoretical support while taking into consideration the
impact of contextually rich environments similar to these that we find in B2C markets.
Nevertheless, the PCI framework so far has received little attention as a potential 297
framework for predicting the adoption decision of IB, which represents a B2C
innovation in a contextually rich environment.
In response to the need to improve our understanding of the IB adoption drivers, the
present study investigated the PCI framework vis-à-vis the TAM and DoI frameworks.
The results from this study have shown that although the explanatory power of PCI,
compared to TAM and DoI, does not improve tremendously, it does improve
significantly. Consequently, the findings from this study provide empirical support to
the arguments of Konana and Balasubramanian (2005) and Orlikowski and Iacono (2001)
that the social and psychological aspects of the decision to adopt IB influence the final
outcome of consumers’ adoption decision, as with all technologically based innovations.
This is a significant contribution because it opens a broader direction into studying the
drivers of the adoption process of technologically based innovations within financial
services, which, compared to other consumer services, are characterised by a long and
intensive infusion of technologically based systems and applications (Mols, 1998).
Another significant contribution for scholars is the rationalization of the PCI
framework and the possibility to derive a more parsimonious approach into
incorporating the social and psychological aspects of the adoption decision with the
utilitarian one. Our results provide a clear indication that not all the parameters of PCI
are significant predictors of the decision to adopt IB. More specifically, relative
advantage, voluntariness, ease of use and image appear to be the only four significant
parameters that are necessary in order to improve the explanatory power of the
decision to adopt IB. These four parameters hence appear to form the core of a
broadened, yet parsimonious, framework that treats the adoption decision of
technologically based innovations in financial services holistically, by addressing the
utilitarian, social and psychological aspects of the adoption decision simultaneously.
Another interesting finding from this study is the improvement of predictive
accuracy when incorporating certain idiosyncratic characteristics of the consumers
pertaining to their demographic and psychographic profile. Present and potential IB
users are likely to be male, with a college or university education, working in both
private and public organizations, innovators and utilitarian shoppers. For instance the
consumer’s degree of innovativeness, his/her lack of an experiential shopping
orientation, his/her level of education, and occupational status as well as gender, are
important predictive variables at the individual consumer’s level, which help to
improve the predictive accuracy of the investigated framework. The implication from
this finding for scholars is that, in order to improve the predictive accuracy of the
decision to adopt an innovative distribution channel such as IB, the idiosyncratic
characteristics of consumers need to be considered.
In fact, the services literature offers compelling, though normative evidence, that when
the service provision system changes, the consumer also has to shift his/her behaviour.
Consequently, the adoption of a new distribution system for offering a service depends on
IJBM the consumer’s ability and willingness to do so (see Bateson and Hoffman, 1999, pp. 15-17,
26,5 36). Thus, by demonstrating that the joint consideration of the consumer’s idiosyncratic
characteristics and his/her perceptions regarding the utilitarian, social and psychological
aspects of the adoption process improve the predictive accuracy of the adoption decision,
this study offers empirical support to the normative arguments that have been suggested
in the services literature (Bateson and Hoffman, 1999).
298 Notwithstanding the scholarly implications from this study, practitioners and bank
managers specifically can also derive significant insights based on our findings. One
important implication for practitioners is the need to take a more customer-centric view
when considering developing technologically based distribution channels. While
simple technology-driven frameworks exist, they are poor predictors of the outcome of
a complex process that is influenced by various context specific parameters and
consumers’ idiosyncratic characteristics. As technologically based distribution

systems become increasingly important for the bank’s overall service offering
strategy, the amount of resources (money, time and effort), that banks will invest in the
development of such channels will increase. Thus, bank managers will be required to
draw more reliable and accurate conclusions regarding the attractiveness of these
channels to bank customers.
A second important implication for bank managers is the need to consider effective
market segmentation and targeting strategies when considering the development of
technologically based distribution channels such as IB. Our study makes it clear that the
likelihood of adopting such a channel is a function of not only the consumer’s perceptions
regarding the utilitarian benefits from doing so, but also of his/her demographic and
psychographic profile. Hence, the effectiveness of a marketing campaign which would
aim to develop the demand for such channels becomes a function of the bank’s ability to
successfully match, through effective segmentation, the “personality” of IB with the
customer’s self-perception. In contrast, a “catch-them-all” approach in promoting
technologically based distribution channels does not appear particularly promising.
Having said that, when considering the proliferation of the bank’s distribution system,
bank managers have to be very clear of target customers’ needs.
6. Limitations and suggestions for further research

Despite the contribution of this study, certain limitations exist which are worth noting.
The most important limitation stems from the non-randomness of the IB non-users
sample. The lack of a publicly available directory of Greek internet users, coupled with
a number of other issues regarding the administration of web surveys, such as inactive
e-mail accounts and low response rates due to spam considerations (Couper, 2000;
Couper et al., 2001; Van Selm and Jankowski, 2006), make the selection of a random
sample impossible.
However, post hoc comparisons of demographics between the present study and the
“Annual Survey of ICT Usage” (Ministry of Development, 2006) show that the sample of
the study closely mirrors that of the Annual Survey. Hence, although clearly a
convenience sample, it is representative of the population under study. Besides, random
samples are not necessarily representative of the population (Churchill, 1999, p. 545).
Random samples merely allow assessment of the reliability of the results. Nevertheless,
given the significant contribution of this study for both scholars and practitioners, future
research in a different context allowing assessment of the reliability of the results is Drivers of
particularly welcomed and advised before we can generalize our findings. internet banking
Another significant limitation of this study is the focus on a single context, which
can be considered as located in the middle of the “rich/lean” continuum suggested by adoption
Bitner (1992). Consequently it is impossible to know whether the results of this study
hold in more “rich/lean” shopping contexts. Nevertheless, future researchers can easily
address this limitation by jointly examining two or more shopping contexts, positioned 299
on various points of the “rich/lean” continuum. This would inform us in more detail
about the moderating role of the shopping context, and it will also produce results that
will allow generalization to a much wider number of contexts.
Notes
1. Provisional data for 2006.

2. Calculations are based on the first sub-sample of IB users (n1 ¼ 429); however, similar
results were obtained when the second subample of IB users (n2 ¼ 429), and the IB non-users
sample (n ¼ 418) were employed.
3. Composite reliability .0.70, AVE . 0.50, discriminant validity is examined by comparing
the square of correlations between any two dimensions that fall under the same subconstruct
(i.e. usability, psychological, social) with their respective AVEs.
4. The multiplication of the log-likelihood by 2 2 is done because 2 2LL has an approximate
x 2 distribution with df that can be estimated as the number of predictors in the new model
plus 1, minus the number of predictors in the baseline model.
5. IB users (Sample A: n ¼ 858) coded “1”, IB non-users (Sample B: n ¼ 418) coded “0”.
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Appendix
Perceived Characteristics of the Innovation (PCI; Moore and Benbasat, 1991)
Relative advantage
.
Using IB speeds up banking (ra1).
. Using IB improves the quality of banking (ra2).
.
Using IB makes banking easier (ra3).
.
Using IB gives me greater control in banking (ra4).
.
Using IB enhances banking (ra5).
Ease of use
. Overall, I believe that IB is easy to use (eu1).
.
Learning to operate IB is easy for me (eu2).
.
I believe that it is easy to get IB to do what I want it to do (eu3).
Compatibility
.
Using IB is compatible with all aspects of banking (comp1).
.
Using IB is completely compatible with my current ways of banking (comp2).
.
I think that using IB fits well with the way I like to do banking (comp3).
Image
.
People who use IB have a high profile (im1).
.
People who use a IB have more prestige than those who do not (im2).
.
Using IB is a status symbol (im3).
Result demonstrability
.
I would have no difficulty telling others about the results of using IB (rd1).
.
I would have difficulty explaining why using IB may or may not be beneficial (rd2).
.
The results of using IB are apparent to me (rd3).
IJBM Visibility
26,5 .
I have not seen many others using IB (vs1).
.
I have seen what others do using IB (vs2).
.
It is easy for me to observe others using IB (vs3).
Trialability
304 .
Before deciding whether to use IB, I can properly try it out (try1).
.
IB is available to me to adequately try it (try2).
.
It is permitted to use IB on a trial basis long enough to see what it can do (try3).
.
I don’t really have adequate opportunities to try out different things on IB (try4).
Voluntariness
.
My bank does not require me to use IB (vol1).
.
Although it was suggested by my bank, using IB is certainly not compulsory (vol2).
.
My use of IB is voluntary (vol3).
Domain Specific Innovativeness (DSI; Goldsmith and Hofacker, 1991)

.
In general, I am among the last in my circle of friends to visit my bank’s new website when
it appears on the WWW.
.
If I heard that my bank’s new website was available on the web, I would not be interested
enough to visit it.
.
Compared to my friends, I seek out relatively little information over my bank’s new
website.
.
In general, I am the last in my circle of friends to know of any new bank websites.
.
I will visit a new bank’s website even if I have not heard of it before.
.
I know about new bank websites before most other people in my circle do.
Shopping orientation (Vijayasarathy, 2003)
Economic
.
I make it a rule to shop at a number of stores before I buy.
.
I can save a lot of money by shopping around.
.
I like to have a great deal of information before I buy.
Recreational
.
I like to go shopping with a friend.
.
I often combine shopping with lunch or dinner at a restaurant.
.
Shopping gives me a chance to get out and do something.
Corresponding author
Spiros Gounaris can be contacted at: sounar@aueb.gr
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Investigating the drivers of internet banking adoption decision: A comparison of three

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Athens University of Economics and Business, Athens, Greece

two important theoretical contributions. First, by incorporating the usability attributes

2. Literature review and research hypotheses

According to Rogers (1962), perceptions regarding those five attributes represent

2.2 The Technology Acceptance Model (TAM)

2.3 The Perceived Characteristics of the Innovation (PCI)

2.4 Research hypotheses (PCI)

Suh and Han (2002) Trust

investigate the possibility of improving the explanatory power by introducing the

Eriksson et al. Guriting and Ndubisi Lassar et al. Present study

Country Estonia Malaysia USA Greece

Age , 25 25.1 3.0 54.5 7.3

Education Primary-secondary 25.1 52.7 11.6

Innovations such as IB are directed to a large number of consumers. Diffusion of

third column of Table IV).

292 Goodness of fit statistics (Hu and Bentler, 1999)

Age (years) 293

Monthly personal income (e)

Innovativeness (means) 6.25 5.51 NA

Shopping orientation (means)

Innovation attributes (means)

Crombach’s Uni- Composite Convergent Discriminant

Compatibility 0.81 U 0.71 0.59 U U

(1) Constanta CON 1,562.786 1 67.2

(5) Demographicsb RA *, EU *, IM *, VOL *, GEN *,

(6) Psychographicsb RA *, EU *, IM *, VOL *, GEN *,

(TAM, DoI, PCI) and

College versus elementary 2.038 0.586 12.108 1 0.001 7.672 667

consumers’ idiosyncratic characteristics. As technologically based distribution

6. Limitations and suggestions for further research

1. Provisional data for 2006.

time: a cross-sectional comparison of pre-adoption and post-adoption beliefs”, MIS

action models to predict utilization of information technology by end-users”, in Kautz, K.

internet banking: an empirical study”, International Journal of Service Industry

Domain Specific Innovativeness (DSI; Goldsmith and Hofacker, 1991)

Shopping orientation (Vijayasarathy, 2003)

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

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(5) Demographicsb RA , EU , IM , VOL , GEN *,

(6) Psychographicsb RA , EU , IM , VOL , GEN *,