Online banking in an emerging market: evidence from Saudi Arabia

This paper aims to investigate and identify the adoption characteristics of online banking in one of the largest economies in the Middle East region, namely Saudi Arabia. The study is based on a questionnaire survey directly distributed to Saudi banks' customers in four major cities. The paper employs different statistical techniques such as factor analysis, multivariate analysis of variance and analysis of variance to draw the results. Eight factors including convenience, trust, difficulty, lifestyle, physical contact, complexity, reference group and third party concern are identified. Results indicate that adopters and non-adopters had varied perceptions on factors such as convenience, trust, difficulty, lifestyle, physical contact, complexity and third party concerns. The findings of this study shall enable Saudi banks to have an in-depth understanding of the factors that affect online banking adoption. Banks should refocus their efforts on customers who have not used online banking services by implementing or tailoring their marketing strategies to increase the rate of online usage. Furthermore, by enhancing online banking services, Saudi banks will be able to minimise the number of branch transactions thereby improving banking efficiency, reducing costs, gaining new clients and creating effective customer satisfaction.