Characterization of Early and Late Adopters of ATM Card in Indian Banking Industry

Abstract

(ProQuest: ... denotes formulae omitted.)The innovations and technological progress are engines of economic growth. Economists and other social scientists have attempted to understand the process of technology diffusion from time to time. When the real need arises, a new idea is generated in the social system which becomes innovation once it is adopted by the community. Thus, Innovation makes the initial idea commercially feasible, and then adoption of the technology by potential users leads to its diffusion (Khan, 2004).Banks have also tried to redefine themselves with new rules by transforming its operations to universal banking and adding new channels with lucrative deals (Indian Banking; McKinsey and Company, 2010). Hence, the banks introduce innovative products through e-banking and e-payment system. This can be regarded as one of the ways for the banks to survive in this environment by launching the electronic products in the market viz. Internet Banking, Plastic Cards, Electronic fund transfer, Mobile Banking etc. which are known for its unique features like more speed to conduct transactions, universal applicability, lesser financial cost etc. while taking into consideration the customers' needs, preferences, perceptions, convenience and need of an hour.In modern era banking industry, information technology has revolutionized the way to approach their customers through innovative products and services. As information technology becomes more and more sophisticated, banks in many parts of the world are adopting a multiple-channel strategy. Also, the right mix of banking channels depends not only on the channel characteristics, but also the preferences of the consumers within a particular market (Wan et.al, 2005). Thus, the new innovations being adopted by banks hold great promises for them to grab huge business opportunities by competing worldwide. In this way, the innovations itself have also lured the banks to reengineer themselves with tech savvy services which can be reached to their customers by bringing flexibility in their "distribution channels" (De Sarkar, 2001). These new enhancements and their acceptance have shifted the bank interest from product centric to customer centric and Electronic banking can be seen as one of that advantageous change.Innovation is thus one leading 'driving force' nowadays, in different businesses. It is therefore important to research the investments in technology and their impact in the bank business (Saunders and Walter, 1994; King and Sethi, 1994). The paper has been divided into six sections. Section I briefly explains the emergence of in formation technology in Indian banking industry, Section II elaborates the introduction and adoption of ATMs by banks in India, Section III deals with the previous literature related to study, Section IV describes the sample and need of the study, however Section V highlights the empirical results and last but not the least Section VI presents the concluding remarks of the results so found.LITERATURE REVIEWClassification of the Adopters of InnovationAny organization does not adopt any innovation suddenly; it takes series of actions and observations while actually that decision is to be taken. Hence, It is particularly important to assess how technology is reducing the 'labor intensive activities, reducing service and processing cost, increasing service levels, and improving the productivity and competitiveness of the organization (Ombati et al., 2010). The main factors contributing the adoption level of innovation are tend to be the organizational readiness, external pressure and perceived benefits (Shaharudin et al., 2012)Most of the diffusion studies have divided the organization's tendency to adopt the innovation in the categories viz. initiators, early adopters, late adopters and non adopters. It has been taken into consideration with the viewpoint of banks as follows:Initiators can be defined as the innovators that have no external pressure on the banks but they are ready to install new technology as they may have the resources and perceive the benefits in it. …