Adoption of technological innovations by bank customers

Abstract

Turkish banking has been going through a considerable technological change duringthe last five years and has been technology intensive rather than human intensive. Inthis study, investigation of the diffusion of four innovations that are products of thisperiod among Turkish bank customers, classification of bank customers by stage ofadoption process and determination of the main characteristics of adopter/nonadoptercategories by considering the activities of both banks and intermediarieswere targeted.Thus, one of the important aims was to evaluate the adoption of four technologybased service innovations, namely credit cards, automated teIIer machines (ATMs),electronic funds transfer at point of sale (EFTPOS) and telephone banking byconsidering both the demand and supply oriented factors. The study consists of twomain parts.a) In the first part, the review of literature about service marketing, evolution of bankmarketing, the impact of technology-based innovations on bank marketing, diffusionof innovations, evolution of bank marketing in Turkish banking sector and the roleand dimensions of technology transfer in the sector are covered.b) In the second part, a three level empirical study that consists of indepth interviewsconducted with 11 bank managers and 20 retailers and face to face interviewsthrough questionnaires conducted with 593 bank customers is reported. Thecomputer program SPSSIPC (V 2.0) was used for analyzing the data obtained fromthe study on bank customers, frequency distribution, cross-tabulation, Z-test, factorand multiple stepwise discriminant analyses were employed to analyze the datacol1ected from the questionnaires.One of the important findings of the study is that although most of the banks haverealized the importance of the presence and satisfaction of the individual customers,the majority of banks introduce aU of the retail banking innovations based onmanagement concerns such as productivity increase or competition without consideringthe result of unacceptance of these innovations by their customers. In spite of thistendency, the present level of awareness and adoption of most of these innovationsare impressive. AInong four innovations, ATM is the most widely known andaccepted one. The findings indicate that credit card follows ATMs in terms of both- viawareness.and adoption level. On the other hand, the findings show that telephonebanking although it is the latest one among four innovations, has gained attentionand acceptance of considerable proportion of bank customers. However, both thelevel of awareness and adoption is very low in the case of EFTPOS as compared toother innovations.Furthermore, the study includes the findings about the sources of awareness, thelevel of knowledge, respondents' attitudes toward different attributes of eachinnovation, the reasons for usage, the problems with the usage, the intention ofnonusers and the underlying reasons of their intentions for each innovation. Withinthe context of these findings, one of the important result is that both the attitudes ofall respondents and experience of users indicate that some technical and managerialweaknesses of banks and practices of retailers might discourage both the nonuser'semploying these innovations and users to continue usage. Another important findingof this study is the existence of a large number of laggards or potential adopters foreach innovation.The study also includes the findings about the comparisons between groupsdetermined according to the adoption behavior of the respondents. These findingsindicate that perceived characteristics of each innovation and attitudes toward theway of provision of bank services in general are significant as much asdemographic/socioeconomic, social attitudinal, communication-, experience-,personality-, and adoption process related variables. The findings about thecomparisons between groups that are determined on the basis of adoption behaviorindicate that although all of these innovations are in the same product category,based on the characteristics of the innovation, the groups for each innovation havesomewhat different characteristics. However, it is possible to determine thecharacteristks of `high adopter` group for the technolob'Y based product categorythat includes all the innovations analyzed. The study shows that this group can bedifferentiated from the others based on experience -'. communication related andsocial variables.The study presents some important implications for bank managers, retailers, publicand private and/or institutions that are intermediaries in transfering technology andthe related academicians on the basis of findings whose general context is cited.