Understanding the Antecedents of Intention to Use Mobile Internet Banking in India: Opportunities for Microfinance Institutions

• DOI: http://doi.org/10.1002/jsc.2005
• Author: Glyn Atwal,Douglas Bryson,Kartik Dave,Himadri Roy Chaudhuri
• Published date: 01 May 2015
• Date: 01 May 2015

Strat. Change 24: 207–224 (2015)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2005 RESEARCH ARTICLE

Copyright © 2015 John Wiley & Sons, Ltd.

Strategic Change: Brie ngs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2005

Understanding the Antecedents of Intention to Use

Mobile Internet Banking in I ndia: Opportunities for

Micro nance Institutions

1

Douglas Bryson

ESC Rennes School of Business , France

Glyn Atwal

Burgundy School of Business , France

Himadri Roy Chaudhuri

International Management Institute , India

Kartik Dave

Birla Institute of Management Technology , India

Attitudes toward the adoption of Internet banking have been well documented in

the literature.  is includes research studies in geographical markets with a high

‘unbanked’ population such as Senegal ( Bryson and Atwal, 2013 ), India ( Keshar-

wani and Bisht, 2012 ), and Vietnam ( Chong et al ., 2010 ). Looking ahead, there

is evidence to suggest that mobile Internet banking, which can be de ned as

‘electronic banking that uses mobile phone technology (or other wireless devices)

to deliver electronic  nancial services to consumers’ ( Riquelme and Rios, 2010 ,

p. 329), will represent the next stage of technological development. It is estimated

that by 2015, US$350 billion in payment and banking transactions could be

facilitated via mobile phones in India ( Aggarwal et al ., 2011 ).

Following the rapid di usion of technology, mobile Internet is gaining increas-

ing acceptance in developing markets and has been recognized as a potentially

e ective and e cient delivery channel for micro nance services. India represents

an interesting case, as it is a country with a high unbanked population but is

witnessing a rapid penetration of mobile Internet-compatible devices. According

to a Boston Consulting Group study, the number of Internet users is expected to

nearly triple, from 125 million in 2011 to 330 million by 2016 ( BCG, 2012 ).

Banks in emerging economies

such as India face opportunities

to extend micro nance services

via mobile Internet banking to

unbanked adults due to advances

in mobile telephony and Wi-Fi

technologies, and the ever-

increasing availability of mobile

devices.

Applying several competing

theories, this study focused on

India to identify the key factors

that predict consumers ’ intentions

to use mobile Internet banking:

(1) perceived usefulness of the

services; (2) attitude toward use

of the services; (3) social or

‘subjective’ norm; and (4)

perceived integrity of the banks or

other institutions involved.

Technology adoption would

bene t micro nance service

providers in developing successful

marketing strategies within the

domain of mobile Internet

banking in India. 1 JEL classi cation codes: G21, M15, M16.

Micro nance institutions in I ndia need to act upon opportunities to extend their

reach concentrating their marketing efforts on factors that predict consumers ’

intention to use mobile Internet banking.

208 Douglas Bryson, Glyn Atwal, Himadri Roy Chaudhuri, and Kartik Dave

Copyright © 2015 John Wiley & Sons, Ltd. Strategic Change

DOI: 10.1002/jsc

 cient in the deployment of an innovation that objectively

seems to be bene cial for all.

It is argued that ‘technology push and customer pull

can and should co-exist within an organization’ ( Stace

et al ., 2005 , p. 181), which implies that micro nance

institutions need to understand how technological inno-

vation relates to current and emerging customer charac-

teristics. Milana and Ashta suggest that mobile Internet

banking might allow micro nance institutions to follow

a more appropriate ‘customer-centered’ approach: ‘instead

of looking for customers that match the proposed product,

it has to start from  nancial services that customers really

need’ (2012, p. 306). If mobile Internet banking is to be

successful overall, micro nance providers need to gain

an understanding of the end user acceptance of mobile

Internet banking, speci cally the antecedents of intention

to use mobile Internet banking.  e objective of this

research study is therefore to identify the key antecedents

to consumers ’ intention to use mobile Internet banking

in India.

Behavioral intention is a key factor in predicting actual

behavior , accounting for 28% of the variance, on average,

based on a meta-study of meta-studies ( Sheeran, 2002 ).

Sheeran argues that in the social sciences, given the solid-

ity and overall implications of that  rm result, 28%

should be considered as ‘good.’  is research has impor-

tant implications in that it points to key factors of inten-

tion to use mobile Internet banking , which in turn will

allow micro nance providers to develop tactics and strate-

gies to adapt to the opportunities and change that mobile

Internet will bring.

Literary review

 e di usion of innovations in society has been examined

in the social sciences since the 1940s and 1950s ( Rogers,

2003 ). In this research, our conceptualizations are based

on an approach that examines three well-established theo-

ries that have been applied to evaluate users ’ intentions to

adopt new technological innovations, plus the inclusion

Interestingly, there is evidence to suggest that a majority

of people will connect to the Internet via mobile

devices — 45% of urban consumers with access to the

Internet use only mobile devices to connect ( Subramanian

et al ., 2013 ).  is phenomenon is underpinned by indus-

try data — the Indian smartphone market grew by 229%

year-on-year in the third quarter of 2013, and smart-

phones accounted for 19% of the overall mobile phone

market compared with 7% in the third quarter of 2012

( IDC, 2013 ).

 e decreasing cost of Internet access, coupled with

the continual expansion of 3G/3G + /4G wireless broad-

band networks and the increasing availability of low-cost

smartphone models, have been contributory factors in the

growth of mobile Internet in India. Pertinently, this phe-

nomenon is not restricted to urban India — projections

suggest that for 2015, nearly 40% of demand (as mea-

sured in aggregate Internet hours that consumers report

they use) will originate from tier 4 towns and rural areas

( BCG, 2012 ).  e implications are signi cant for micro-

 nance providers as, while more than half of Indian

households do not have a bank account, of the households

without a bank account, 42% have at least one mobile

phone ( Subramanian et al ., 2011 ).  e potential market

opportunity is huge.

 e adoption of more technologically advanced deliv-

ery systems, such as mobile Internet, could potentially

increase access to  nancial services to the unbanked. Batra

and Sumanjeet ( 2011 ) identi ed three main segments of

the micro nance market in India.  e  rst segment con-

sists of landless agricultural laborers and manual laborers.

 e next segment consists of small and marginal farmers

and workers in household micro-enterprises, and the third

segment of farmers involved in commercial crops and

entrepreneurs involved in non-agricultural activities such

as manufacturing. Given the signi cant socio-economic

di erences within these segments, we acknowledge that

the initial adoption of mobile Internet for the delivery

mode of micro nance services would be more relevant for

the third segment. However, technology alone is not suf-