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Published/ publié in Res Militaris (resmilitaris.net), vol.13, n°3, March Spring 2023
Moderating Effects Of Consumer Innovativeness On Perceived
Risk And Online Banking Usage In Chennai
By
K.R. Abarna
Research Scholar, Vels Institute of Science, Technology and Advanced Studies (VISTAS),
Pallavaram, Chennai, Tamil Nadu, India-600117
Email: abarnaravi1991@gmail.com
Dr. V Vijayalakshmi
Former Associate Professor, Research Supervisor &Guide,Department of Commerce,
VelsInstituteof Science, Technology and Advanced Studies (VISTAS), Pallavaram, Chennai,
Tamil Nadu, India-600117
Email: vijayalakshmi.vels@gmail.com
Dr. V Andal
Assistant professor & Research Co-Guide, Corresponding Author, Department of Commerce,
Vels Institute of Science, Technology and Advanced Studies (VISTAS), Pallavaram,
Chennai, Tamil Nadu, India-600117
Email: andalgokul79@gmail.com
Abstract
Customers can make financial transactions using online banking (also known as
Internet banking), their actual or virtual bank or a credit union's secure website. Only the
bank's customer can use internet banking to manage his account. The bank will give its
customers a User ID and Password to use the online banking feature. Electronic banking
combines several technologies to deliver financial products to the user, including online
banking, automated teller machines, and mobile phone banking. The survey aimed to
determine the factors influencing the customers using the electronic banking services.
Because providing excellent customer service is a crucial aspect of banking. The main goal of
the research is to estimate how happy customers felt using E-Banking products and perceived
risk.
Keywords: Online banking, Customers, technological knowledge
1.1 Introduction
The automated mode of delivering both new and established banking services and
products to the consumer directly over electronic communication channels is known as
electronic banking. Electronic banking combines technologies through public or private
networks that let individual consumers access their accounts, conduct quick transactions, and
get up-to-date information on the newest financial goods and services. It supports several
platforms, including online banking, telephone and television banking, automated teller
machines, mobile banking, and desktop and mobile banking services. Modern electronics and
information technologies like the web, cell devices, netbooks, and desktops allow consumers
to choose and use their desired features.
Res Militaris, 13, n°3, March Spring 2023
1009
They can also see how modern technology is used to deliver electronic banking
products through permissions and facilities. Banks must invest in capital projects and cutting-
edge technology to lower operating costs and increase client loyalty, but they must also
maximise asset value while lowering operating expenses. The present study is inclined to find
the intrinsic relationship that exits among the factors of consumer innovativeness and the
usage of online banking. The study also intended to estimate the nature of effects of
perceived risk in controlling the usage of online banking. The moderating effects and their
important role in determining the usage of online banking is also encountered in this research.
1.2 Literature Reviews.
Huseynov, F., & Yıldırım, S. Ö. (2016) argued the role of Internet users’ interest,
evaluation, trust, and customer intention in the financial services and online shopping. The
predominant reasons are the product characteristics, financial transactions during online
shopping, and marketing policies of the seller. The customers expect more privacy and safety
during their venture in online shopping attached to internet potentiality.
Clemes, M. D., Gan, C., & Zhang, J. (2014) identified and ranks seven important
decision factors: perceived risk, consumer resources, service quality, subjective norms,
product variety, convenience, and website factors.
Abbade, E. B. (2014) adaptive optimism and pioneers impacts positively on the
propensity to the electronic commerce. Most of the consumers are not fully equipped for the
marketing interaction with sellers. The customers perceived the existence of flaws in the
transactions along with lack of insecurity. .
Melewar, T. C., Alwi, S., Liu, M. T., Brock, J. L., Shi, G. C., Chu, R., & Tseng,
T. H. (2013) three perceived benefits namely price benefit, convenience
benefit, and recreational approach. The customers seek for safety assurance, potential
website, confidence and scenarios of optimistic attitude. Customer trust always emerged out
of safe online purchase..
Wu, W. Y., Quyen, P. T. P., & Rivas, A. A. A. (2017) ascertained e-services
dimensions with respect to the factors aesthetic appeal, customization, usability, and financial
security respectively. The customer trust can get its momentum through the optimistic
attitude delivered from the components of website quality, safety and internal approach of the
marketers.
Chen, Y. H., Hsu, I. C., & Lin, C. C. (2010) argued the innovative notions behind
the continuous applications of online shopping, It is also found that the quality of websites to
ascertain the product attributes based on customer preference is very much needed. The
customers are categorized with respect to their depth of expertise.
Aggarwal, A. (2020) The customer attributes of online purchase namely trust,
technology and money safety consists of eight different factors namely web suite quality,
involvement in shopping, quick dealings, security, digital transfers, transparency, price
advantage and safe and quick delivery, revealing the online shopping behaviour..
Katta, R. M. R., & Patro, C. S. (2017) identified the prevailing heavy competition
among the e- commerce vendors and they have their own promotional strategies to intensify
the online sales. They adopt the strategies for customer attraction, customer satisfaction and
Res Militaris, 13, n°3, March Spring 2023
1010
customer retention respectively. They have attractive websites to induce the consumer
purchase intentions
Hasan, B. (2016). Identified the three website design characteristics had significant
negative effects on perceived irritation in online shopping context.
Patro, C. S. (2018). Compared the attitudes of online consumers and conventional
consumers and found that the online consumers are smart enough in their purchase control,
price consciousness than conventional consumers. It is also found that the online consumers
have accessibility for more interaction with their vendors. They have the potentiality to derive
more adequate information about the availability of any commodity.
Qalati, S. A., Vela, E. G., Li, W., Dakhan, S. A., Hong Thuy, T. T., & Merani, S.
H. (2021) determined the contribution of the predominant factor perceived risk in the form
of moderators over trust in online shopping, They take a dynamic purchase intention based on
the depth of risk involved in the purchase. The important factors trust and purchase intentions
also depend upon the service quality of sellers, website quality and reputation of the
organization.
1.3 Research Gaps.
The reviews revealed that there is a relationship between perceived risk and online
banking usage and also the factors awareness, technological knowledge and timely benefits
are not directly correlated to the usage of online banking but these factors are able to create
the moderating effect over the usage of online banking. The research question also arises
whether the consumer innovativeness of online banking comprises the components
awareness, technological knowledge and timely benefits to the customers. In order to fill the
research gaps the researcher intended to test the following five hypotheses
1.4 Hypotheses.
1. Perceived risk and online banking usage of customers are inter related.
2. Consumer innovativeness comprises the factors awareness, technological knowledge
and timely benefits
3. Awareness of online banking fluctuate (increase or decrease) the online banking usage of
customers.
4. Technological knowledge of online banking fluctuate (increase or decrease) the online
banking usage of customers
5. Timely benefits of online banking increase the online banking usage of customers
1.5 Objectives Of The Study:-
• 1. The perceived risk and usage of online banking are enumerated for their
relationships.
• 2...To estimate the role of awareness, technological knowledge and timely benefits of
online banking on its usage.
1.6 Research Methodology
The research leans the primary data derived from the users of online banking. These
responses are emerged through a scientifically framed questionnaire. It consists of
demographic details of customers of online banking and 5 statements each for the five factors
perceived risk, online banking usage, awareness, technological knowledge and timely
benefits. These statements are rationally answered by the customers of online banking in a
required measure.
Res Militaris, 13, n°3, March Spring 2023
1011
Pilot study is carried out to check the reliability of statements and found the cron bach
alpha co efficient 0.855 which is the above required bench mark value 0.75. Convenience
sampling technique is exploited to collect the 500 responses from the customers of online
banking. The collected responses are systematically tabulated and the multivariate statistical
tools linear regression analysis, moderator regression analysis, confirmatory factor analysis
are applied over them to test all the four hypotheses of the research.
1.7 Analysis And Discussions.
In case of hypothesis testing 1, linear multiple regression analysis over the
independent variable perceived risk and the dependent factor usage of online banking.
Table 1 Coefficients for perceived risk
VAR
UNAP
SAP
t
Sig.
B
SER
BET
1
OVA
3.246
.119
27.331
.000
Perceived risk
.218
.032
.294
6.860
.000
a. Dependent Variable: Online banking
The regression analysis revealed the beta value=.294, t-value=6.860 and p-value=.000
which are statistically significant to approve the perceived risk and its domination over usage
of online banking. In fact, perceived risk bearing capabilities of customers is able to decide
their depth of usage of online banking. This supports the hypothesis H1
In order to test the H2, confirmatory factor analysis (CFA) is found appropriate to
validate that the three components awareness, technological knowledge and timely benefits
have their explanatory power to surmount consumer innovativeness. The results of following
diagram and table are used to test the model.
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Table 2 Model Fit Indices And Bench Markks For Consumer Innovativeness
S.NO
Fit indices
Values
Bench mark values
1
Chi-square
5.388
-
2
P-value
0.410
>.05
3
Goodness of fit
index(GFI)
0.964
>.9
4
Comparative fit
index(CFI)
0.962
>.9
5
Normed fit index(NFI)
0.961
>.9
6
Root Mean Square Error
of
Approximation(RMSEA)
0.07
<=0.08
From the above table and diagram, it is identified that all the six fit indices found
more suitable for required bench mark values . These six fit indices confirm that the
consumer innovativeness can be considered as the combination of the components awareness,
technological knowledge and timely benefits. This supports the hypothesis H2.
In this section hypothesis testing 3,4,5 are done using moderation regression analysis.
The scenario in this moderation regression analysis is considering, perceived risk as
independent variable and usage of online banking as dependent variable and the components
of consumer innovativeness namely awareness, timely benefit and technical knowledge as
moderation variables. Moderation variables are not directly related to the dependent variable,
where the multiplication of scores of these three variables with independent variables
separately would create moderate effects (i.e) it may increase (or) decrease the effect of
independent variable perceived risk. The qualification of moderately variable is that they
should not have direct correlation with the dependent variable. In order to prove this the
following correction matrix is obtained.
Table 3-Correlations among the moderator factor
Online
banking
Awareness
Technological
knowledge
Timely
benefits
Online banking
Pearson
Correlation
1
.011
.041
.062
Sig. (2-tailed)
.452
.541
.394
**. Correlation is significant at the 0.01 level (2-tailed).
The three variables awareness, timely benefit and technical knowledge have their
correlation values .011, .041 and .062 which are highly insignificant to qualify as a
moderating variable. Each of these three scores of variables are separately multiplied with
the scores of the independent variables to create the new moderating variables highly
conducive to exploit the moderation regression analysis.
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1013
Table Coefficients for moderating variables.
VAR
UNAP
SAP
t
Sig.
B
SER
BET
1
Perceived risk
1.550
.155
-.187
-9.976
.000
Awareness
.128
.026
.192
4.918
.000
Technological
knowledge
.424
.038
.442
11.039
.000
Timely benefits
.110
.036
.124
3.076
.000
a. Dependent Variable: Online banking
In this type regression analysis, it is found that the perceived risk (B-value=-.187, t-
value=-9..976, P-value=.000) are negative. It implies that the more perceived risk would
diminish the usage frequency of online banking. In this same nature, the moderating
variables awareness (Beta=.192, t=4.918, p=.000) technology (Beta=.442, t=11.039, p),
timely benefits (Beta=.124, t=3.076, p=.000) have their positive beta and t-values with very
good significance. This shows that the combination of awareness with perceived risk
increases the usage of online banking as evident from positive beta and t-values. Similarly
(Copy the variables) combined with perceived risk boost the frequency of usage of online
banking. This supports the hypothesis H3, H4 and H5.
1.8 Findings and conclusions
The research revealed that online banking usage absolutely depends upon the factor
perceived risk understood by the consumers. The fluctuation in the risk fluctuation regarding
the usage of online shopping is due to the awareness level of the customers, their
technological knowledge about the perceived risk and their realization of timely benefits of
online banking. Customers perceived that online banking is convenient for them and they are
able to curtail the waste of time in visiting the branches of Banks.
Customer innovativeness depends upon the variety and depth of awareness regarding
technology, convenience, safety and security. Besides this awareness of the customers
technological knowledge is the evidences for innovation and their involvement to use online
banking and to reap the timely benefits without wasting their precious time.
1.9 Managerial implications.
The study revealed that the perceived risk hamper the usage of online banking by the
customers. Therefore it is suggested that the banks and financial institutions should create
more awareness among the customers regarding secured and safe online banking transactions.
The banks and the financial institutions should have a separate customer relationship
management strategy to create innovative ideas among the customers particularly; the
innovative strategies must focus towards creating technological knowledge among the
customers of online banking.
The frequency of usage in online banking can be increased by importing confidence
on technology and motivate them to realize the convenience in using online banking. They
must be taught to read the advantages of online banking by saving their precious timings.
1.10 Limitation and scope for future study
The research mainly focuses on two entities perceived risk realised by customers and
their frequency of usage of online shopping. The study is limited to only these two factors.
Similarly, the customer’s innovativeness consists of several factors, but the study highlights
only these three factors awareness, technological knowledge and timely benefits. The study
Res Militaris, 13, n°3, March Spring 2023
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can also be extended by the future researchers regarding their moderate effects of
advertisements and celebrity endorsements over the usage of online banking.
A main focus on customer’s relationship management in increasing the usage of
online banking would yield interesting innovative results.. The smooth customer relationship
management increased the confidence of customers and it becomes a powerful motivator to
increase the usage of online banking. This study can be extended to other digital banking
transactions like mobile banking, internet banking, credit card management and core banking
solutions.
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