Facilitating adoption of e-banking in Saudi Arabia through reduction of perceived risk in e-banking

Abstract

A significant amount of work has been done over last one decade on identifying factors that influence adoption of e-banking among consumers. Despite a decade of research the same issues have been highlighted as influencing factors of adoption of e-banking and this is because the existing research has provided little practical guidance on how to address the issues highlighted in the researches in order to increase adoption of e-banking. This research aims to investigate one of the key factors identified as influencing factor of adoption of e-banking, perception of risk. This research looks at perception of risk in Saudi e-banking sector in detail, identifying the factors that affect the perception of risk and how to resolve this so as to reduce the perception of risk and increase adoption of e-banking. This research also considers the influence of cultural factors on perception of risk and adoption of e-banking. This research adopts a pragmatist philosophy and mixed method design in order to provide sufficient depth and understanding of the findings to be of practical use. Data was collected using questionnaire surveys and focus groups in two stages. Based on the findings of the questionnaire survey the conceptual framework was validated. Then focus group interviews were conducted to obtain more insight into the responses and findings of the research. One of the contributions of the focus groups was identification of solutions to the problems that related to perception of risk. This research finds security and financial risks are the key risks affecting perception of risk in Saudi e-banking sector. But in addition other risks such as transaction risk, time risk, and performance risks also influence perception of risk. In addition, this research finds that e-banking should be implemented considering the cultural dimensions in mind because cultural factors also have a significant influence on the perception of risk in Saudi e-banking sector. Based on the findings, this research proposes several solutions to reduce perception of risk in Saudi e-banking sector. The key recommendation is that e-banking channel should preserve some of the attributes of the brick and mortar channel which are valued high by Saudi customers such as one-to-one interaction.