Effects of Perceived Risk and Subjective Norms on Internet Banking Adoption Amongst the Students of University of Kelaniya: A Multilevel Linear Model Analysis

Abstract

Challenging technology advancements necessitate robust macroeconomic performance to support overall economic development. Within the service sector of the economy, one of the broadly studied areas of technological transformation is retail financial services; particularly consumer banking activities. Internet banking enables customers to experience a vast array of financial services through e-banking websites. Nonetheless, in practice; this phenomenon is contingent on the particular context. Hence, this research addresses the significance of subjective norms and perceived risk towards acceptance of consumer internet banking in the Sri Lankan context with special reference to private commercial banks. The sample was drawn from the students of the University of Kelaniya those who are participating in the weekend study programs. The students of the Doctor of Business Administration Course attached to the university were selected as enumerators for data collection. Data collected through self-administered questionnaires from the respondents. Initially, 400 questionnaires were distributed and 287 duly completed questionnaires were considered for the final data analysis. TAM has been extended using the subjective norms and perceived risk variables and dimensions of the variables were measured by a five-point Likert scale. Cronbach’s alpha was used to check reliability. To test the hypotheses, ANOVA, ANCOVA, and multilevel linear models were used. The empirical evidence supported three hypotheses indicating the significance of the variables/constructs on the adoption of internet banking. In conclusion, the authors have presented several suggestions for research studies, in time to come.