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Keywords
Internet, Banking, South Africa, Tertiary education, Virtual banking, Payments
Abstract
This study follows up a study examining the effectiveness of Internet marketing, which found that only 22.6 per cent of respondents banked online. This study aims to determine respondents' reasons for not banking online, and to develop strategies for banks to get people banking online. A sample of 369 consumers was drawn from two universities in Kwazulu-Natal. Universities were chosen because they are an untapped e-commerce market segment. Employees at universities fit the profile of typical Internet users. Data were collected using a Web-based questionnaire. Statistical analysis revealed that more males used Internet banking than females. Automated telling machine usage was far greater than Internet banking usage. A large percentage of Internet bankers used the service for inter-account transfers and checking balances/statements. Security was the prime issue for those not banking online. Potential customers wanted guaranteed safety and loyalty rewards to get them to bank online. Internet banking has the potential to grow amongst tertiary institution employees.
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Introduction
Business is being revolutionised every day as a result of the influence of the Internet. Organisations have become leaner, meaner, more profitable and more competitive. New businesses have sprung up on the Internet without a physical presence (i.e. virtual stores). Some existing organisations have moved from a bricks-and-mortar format to a clicks-and-mortar format, whilst others have adopted a more conservative approach and have both a physical and a virtual presence. Banks are no different in catching the Internet bug. There are virtual banks, such as Egg in Britain (Business Report, 2000), Security First Network Bank in America, and Enba in Europe (Goldfinger, 2001), which only exist on the Internet, and there are banks which have a physical presence but offer most of their services online. In a study conducted by Singh (2001), examining the effectiveness of Internet marketing, it was found that of the respondents in that study, only 22.6 per cent banked on the Internet. It was this statistic that prompted this study, as the author wished to determine why people did not bank online, and what...