A model for the use and acceptance of digital banking in Uganda

Abstract

In the last few decades, banks have made huge investments in technology to reduce their cost and improve customer’s experience. Banks are offering digital banking channels such as ATM, Internet banking, mobile banking, digital banking kiosks to deliver best quality services to customers with the expectation of increasing profitability and reducing operating cost. It is observed that the bank’s costs reduce with the shift of a major chunk of customers to modern banking channels. However, the expected reduction in operating expenses has not been achieved yet by the banks in Uganda as they are still struggling to move customers towards digital banking channels despite the strong demonstrable benefits. The user adoption of digital banking practice has remained low, thus making it difficult to realize the associated benefits. This is largely attributed to the fact that the factors affecting customers’ intentions towards the usage and acceptance of digital banking practice are not well understood in Uganda. Ugandan banks need to understand that making huge investments in technology is not enough unless most bank customers adopt it for banking transactions. This study examines the factors influencing customers’ intentions towards the usage and acceptance of digital banking practice in Uganda. To this end, the study adopted the UTAUT model and added personal innovativeness in order to determine factors influencing customers’ intentions towards usage and acceptance of digital banking practice in Uganda. The derived model was verified quantitatively by means of a questionnaire analyzed through use of SPSS and STATA version 5.1 software was used to test hypotheses to assess the degree to which the model successfully influences customers’ intentions towards use and acceptance of digital banking practice and to as well provide empirical support for use in future studies of the same context. Our results show that, consumers’ behavioural intentions towards the use and acceptance of digital banking practice was found to be positive and significantly affected by PE, EE, SI, FC and PI. The major contribution of this study is the developed model that guides the usage and acceptance of digital banking practice in Uganda. The major limitation of the study was that the study adopted the UTAUT model by adding only one context related factor. Besides this factor, there might be some additional latent factors that may also influence the customers’ intentions towards the use and acceptance of digital banking practice. Future studies can therefore, explore those other factors by explorative studies or by using other information system (IS) theories.