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23,2 The relationship between
consumer innovativeness,
personal characteristics, and
online banking adoption
Received March 2004
Revised July 2004
Walfried M. Lassar
Accepted October 2004 Florida International University, Miami, Florida, USA
Chris Manolis
Xavier University, Cincinnati, Ohio, USA
Sharon S. Lassar
Florida Atlantic University, Boca Raton, Florida, USA

Purpose – This paper explores the relationships between consumer innovativeness, self-efficacy on
the internet, internet attitudes and online banking adoption, while controlling for personal
Design/methodology/approach – The study integrates the technology acceptance model (TAM)
and adoption of innovation framework to develop predictions of online banking acceptance. It
distinguishes between innate consumer innovativeness, a generalized personality trait, and
internet-domain-specific or actualized innovativeness in order to explore consumer characteristics’
impact on adoption. Data are analyzed using logistic regression.
Findings – While results confirm the positive relationship between internet related innovativeness
and online banking they also surprisingly show that general innovativeness is negatively related to
online banking.
Research limitations/implications – Results may or may not differ according to whether
consumers are using online, telephone banking, electronic funds transfer (EFT) or direct bill payment.
Our results may generalize to telephone banking and EFT as these products, like online banking,
require an active consumer role in using the product. With direct bill payment, consumers need only
set up the process initially and then monitor it on a semi-regular basis.
Practical implications – Findings suggest that the type of consumer innovation matters in
understanding the adoption of e-banking processes. This supports the notion that online shoppers are
distinct from traditional non-online shoppers or highlight the unique nature of purchasing financial
versus non-financial products. Banks offering e-banking need to recognize the importance of
internet-specific consumer innovation characteristics.
Originality/value – This paper closes a research gap as the model tested provides insights toward
understanding the consumer-based phenomenon of e-banking, and serves to evaluate the TAM in this
context. In contrast to previous research the study utilized an actual measure of e-banking adoption
versus a measure of intention to use the technology.
Keywords Innovation, Banking, Consumer behaviour, Electronic commerce
International Journal of Bank Paper type Research paper
Vol. 23 No. 2, 2005
pp. 176-199 Introduction
q Emerald Group Publishing Limited
Practitioners and academics alike have noted the recent “revolution” in retail banking
DOI 10.1108/02652320510584403 services across the US (Kolodinsky and Hogarth, 2001). The transformation from
traditional, “brick and mortar” banking to electronic banking (e-banking) has been Consumer
momentous. Not since the advent of the automatic teller machine (ATM) has the retail innovativeness
banking industry witnessed such significant and extensive change. Formally, e-banking
comprises various formats or technologies, including telephone (both landline and cell
phones) banking, direct bill payment, electronic funds transfer (EFT), and, most
recently, PC or online (internet) banking (Power, 2000; Weitzman, 2000). Similarly, Chou
and Chou (2000) identified five basic services associated with online banking: 177
(1) view account balances and transaction histories;
(2) paying bills;
(3) transferring funds between accounts;
(4) requesting credit card advances; and
(5) ordering checks.
In 1999, no less than 85 percent of US households had at least one EFT feature on their
bank accounts, and seven million households used online banking (at the time, this
represented approximately one-fifth of households with online capabilities). Since that
time, these numbers have increased significantly, and they are expected to increase
considerably in the years ahead. Some account-to-account transfer services
(Wells Fargo’s Billpoint, etc.), for instance, are said to attract more than 10,000 new
users daily (Janik, 2000; Kolodinsky and Hogarth, 2001). By the end of 2002, some
estimates suggested that as many as 30 percent of Americans were doing some sort of
consumer banking online (Bruno, 2003). And, Bank of America experienced a
50 percent growth in online banking customers in 2003 (Ramasaran, 2003). Although
some researchers have argued that e-banking has not lived up its potential as of yet,
e.g. Sarel and Marmorstein (2003) and Wang et al. (2003), we maintain that e-banking
has become a mainstay of modern society, and, in the future, will likely become an even
larger and more significant element of the overall, retail banking experience.
Given the current and likely future magnitude of e-banking, not only in the US but
the world over (Mattilia et al., 2003), retail banks must gain a comprehensive
understanding of this consumer-based, electronic revolution. Among other things,
banks must understand who specifically is adopting and utilizing this new commercial
technology and why. Ultimately, banks should be in a position to predict who the users
of this new technology will be by, first, understanding important user characteristics,
and, second, understanding how these characteristics interact with new e-banking
processes and procedures. Although the reasons behind this electronic phenomenon
are many and varied, there are likely consumer characteristics that can be identified
and investigated in order to gain such an understanding. What are needed are
theoretically sound, empirically tested models capable of assisting banks and their
managers as they strive to understand which consumers will accept and use the
new technology, and why these particular consumers are poised to adopt the new
procedures. The purpose of this paper is to propose and test one such model.
Since e-banking is largely a technology-based procedure or process, it is logical to
consider the technology itself when trying to understand who is utilizing it.
Importantly, from a consumer standpoint, the technology necessary to reliably and
securely process online banking transactions has only recently become available
and easily accessible to consumers. Technological innovations in and of themselves,
IJBM however, do not necessitate the level or magnitude of change as seen recently in the
23,2 retail banking industry. Beyond being available, a technology must offer clear-cut
benefits for both buyers and sellers in order to be successfully adopted and utilized.
E-banking offers numerous benefits for both banks and their retail customers.
A primary benefit for the bank is cost savings; and, for the consumer, a primary benefit
is convenience (Bruno, 2003; Gerrard and Cunningham, 2003). The bank can provide
178 the customer with convenient, inexpensive access to the bank 24 hours a day, seven
days a week. Although critically important, the benefits of this new technology do not,
in and of themselves, explain why some consumers embrace the new technology and
accompanying procedures and others do not. In this way, benefits may be seen as a
necessary but insufficient condition toward understanding e-banking. What further
explains and ultimately predicts the use and adoption of e-banking among retail
Research investigating the expansive growth and use of the internet among
consumers suggests that internet technology serves as an important source of
consumer information that has become increasingly more user-friendly and accessible
while at the same time less expensive (Bonn et al., 1999). Research in this area suggests
a distinction between consumers who use the internet to browse and gather
information and those who use it to actually make purchases (e-commerce, e-tailing,
e-shopping, etc.). One study, for instance, found that 81 percent of those who browse
the internet for goods and services do not actually make online purchases (Gupta, 1996),
while another study found that, of those who initiated an online purchase transaction,
only 25 percent followed through with the purchase (BizRate, 1999). Among the
variables found to affect whether or not consumers engaged in online shopping were
attitudes toward internet purchasing, perceived usefulness and ease of use of the
internet for purchasing purposes, online experiences, and various personal
characteristics such as buying impulsiveness and opinion leadership. In general,
higher levels of these variables were associated with more online purchasing (O’Cass
and Fenech, 2003).
Research addressing new product adoption behavior appears particularly relevant
to the e-banking phenomenon (Lokken et al., 2003). Indeed, Im et al. (2003) call
specifically for research investigating the relationship between new product adoption
characteristics among consumers and e-banking. Research on new product adoption
behavior strives to unearth, among other things, why certain consumers adopt and use
new products and services while others do not. In other words, why are certain
consumers more innovative than others? Based largely on Roger’s pioneering work
in the diffusion of innovation (Rogers, 1995; Rogers and Shoemaker, 1971), adoption
studies have been conducted in the domain of e-banking. In a study looking at
consumers in Singapore, for example, Gerrard and Cunningham (2003) found that
those who adopted internet banking compared with those who did not believed internet
banking to be more convenient, less complex, and more combatable. In another
study, Liao and Cheung (2002) found that consumer expectations regarding accuracy,
security, transaction speed, user-friendliness, and involvement were important as to
whether or not consumers adopted internet-based, e-banking.
Conceptually speaking, there are two primary theoretical orientations or
explanations used to understand this adoption and use among consumers, and both
concern innovation. The first relates personal consumer characteristics to new-product
adoption or innovation behavior and suggests that consumers who adopt new Consumer
products – referred to as innovators or actual innovators – often have specific and innovativeness
identifiable characteristics. Compared with non-innovators, innovators, for example,
have higher levels of income, education, opinion leadership, and both social mobility
and participation, and are usually younger and have more favorable attitudes toward
risk (Dickerson and Gentry, 1983; Gatignon and Robertson, 1991; Rogers, 1995).
Importantly, innovators compared with non-innovators are also thought to make 179
actual new product acquisitions. The second explanation stresses the identification of
consumer innovators by way of a generalized, unobservable predisposition referred to
as “innate consumer innovativeness” (Foxall, 1995; Hirschman, 1980a; Midgley and
Dowling, 1993). In a recent study, Im et al. (2003) proposed and empirically tested a
contingency model that combines these two theoretical orientations. In short, the
researchers found that both personal characteristics and innate consumer
innovativeness positively affect new product ownership.
Rooted in technology, e-banking is a process or procedure and not a consumer
product per se. Although it may have appeared and even behaved like a new product or
service when it was initially introduced, e-banking is now most accurately portrayed as
a relatively new, convenient, and technologically-oriented procedure whereby,
consumers can accomplish customary banking tasks more quickly and easily than
before. When online or internet banking was in its infancy, “pure-play e-banks”
emerged. These banks were solely electronic, and, as such, did not have physical,
brick-and-mortar facilities. Since that time, pure-play e-banks have all but disappeared;
today most e-banking takes place by way of traditional brick-and-mortar banks who
offer the new technology along with more conventional procedures. Thus, we are
currently investigating whether or not consumers accept and/or adopt a new
technologically-based procedure compared with a new product or service; consumers
do not necessarily take ownership of or purchase anything. Accordingly, we now turn
our attention to research that addresses specifically when and why people accept new
An influential research model in the fields of information technology and
information systems, the technology acceptance model (TAM), suggests that a
prospective user’s overall feelings or attitudes toward using a given technology-based
system or procedure represent major determinants as to whether or not he/she will
ultimately use the system (Davis, 1993). Adapted from the Theory of Reasoned Action
(Azjen, 1980; Fishbein and Ajzen, 1975), TAM has been utilized in numerous settings
involving varying forms of technological adoption (Venkatesh and Davis, 2000).
O’Cass and Fenech (2003) suggest that, although TAM is specifically tailored to the
acceptance of computer-based technologies, “its robust and parsimonious structure has
allowed applications in other technological adoption situations with appropriate
adjustments” (p. 82). Importantly for the current investigation, TAM has been utilized
successfully to help understand and explain information systems/technology adoption
in marketing contexts, including internet-based, retail consumer behavior (O’Cass and
Fenech, 2003). Researchers have suggested that, in addition to utilizing feelings and/or
attitudes to explain the use of a particular technology, “external variables” may be
added to TAM as a way of improving the model’s predictive power (Davis et al., 1989;
Davis, 1993). In marketing contexts, various external variables have been suggested
and include a broad range of shopping motives (Eastlick and Feinberg, 1999),
IJBM consumer skill/expertise, various demographic variables (Mattilia et al., 2003)
23,2 personality characteristics, and computer anxiety (Harrison and Rainer, 1992).
In a particular, Wang et al. (2003) used an extended TAM framework to model
behavioral intentions with respect to using internet banking systems. In short, the
researchers found that perceived usefulness, ease of use, and credibility affected
directly intentions to use internet banking systems while computer self-efficacy had an
180 indirect effect (Wang et al., 2003).
Based on relevant, extant research, and steeped in the TAM theoretical tradition, we
next propose a theoretically sound model useful toward understanding and explaining
the consumer-based phenomenon of e-banking. To empirically test our model, we focus
specifically on online (internet) or PC banking as this represents the newest and
fasting-growing component of e-banking (Bruno, 2003). In the end, our model will
assist banks and their managers as they strive to make strategically sound,
consumer-related decisions.

Conceptual model and hypotheses

Consumer innovativeness
As mentioned above, consumer innovativeness appears particularly useful in helping
to understand the e-banking phenomenon, and past research has conceptualized
consumer innovativeness in two primary ways (Im et al., 2003). On the one hand,
consumer innovativeness is defined as actualized or domain-specific by the virtue of
identifiable characteristics (e.g. opinion leadership, etc.) and actual acquisitions of new
information, ideas, and products (Hirschman, 1980a; Midgley and Dowling, 1978).
On the other hand, consumer innovators are identified based on their unobservable
“innovative predisposition” across product classes (Midgley and Dowling, 1993), often
referred to as innate or general innovativeness (Hirschman, 1980a). Both of these
conceptualizations may be useful in depicting and understanding e-banking.
The actualized innovativeness concept has received in-depth empirical attention
within the diffusion of innovation framework (Rogers, 1995), and has been of particular
interest in innovation diffusion research generally, and information technology
(Agarwal and Prasad, 1998) and marketing research (Midgley and Dowling, 1978;
Flynn and Goldsmith, 1993) specifically. According to this framework, a “personal
innovativeness” construct is conceptualized as the degree and speed of adoption of
innovation by an individual. In a marketing context, the construct has been measured
via purchase intentions and opinions for certain new products, the number of new
products owned, and the relative time of adoption for particular new products, and is
usually applied to domain-specific products and services.
The second innovativeness concept represents an innate phenomenon and is widely
used in psychology to identify innovative characteristics of individuals (Kirton, 1976).
According to this perspective, innovativeness is considered a generalized personality
trait (also called “global innovativeness”) (Goldsmith and Hofacker, 1991; Goldsmith
et al., 1995). This conceptualization of innovativeness has also been utilized in the
marketing literature (Midgley and Dowling, 1978; Flynn and Goldsmith, 1993) and is
thought to represent a highly abstract and generalized personality trait (Im et al., 2003).
Examples as to the levels of abstraction inherent across the various literatures utilizing
this perspective include “a willingness to change” (Hurt et al., 1977) and the receptivity
to new experiences and novel stimuli (Goldsmith, 1984; Leavitt and Walton, 1975).
Of particular interest to the current study is Midgley and Dowling (1978) Consumer
marketing-based conceptualization of innovativeness. Representing the innate type innovativeness
or variety of consumer innovation, this conceptualization incorporates
communication independence which is determined as the degree to which a
consumer’s decision process is independent of others’ personal influence within the
social system. Feick and Price (1987) identified consumers who agglomerate
marketplace information and initiate discussions that, in turn, influence other 181
consumers. Referred to as “Market Mavens”, these consumers are at the forefront
of new market information concerning products, places to shop, and other facets of
the marketplace. Mavens are thought to initiate discussions with and respond to
information requests from other consumers. Influencing versus being influenced by
others, Market Mavens clearly possess innate innovation characteristics, or possess
them to greater degrees than non-Market Mavens. Banking on the internet is a
relatively innovative behavior that is more likely to be adopted by innovators than
non-innovators. We hypothesize the following:
H1. Innate or general marketplace innovation characteristics will be positively
related to online banking adoption.
The innate approach to innovativeness is limited to the extent that consumer
innovation is more domain or product/service specific and less of an individual
personality characteristic. As the name suggests, domain-specific (or actualized)
innovation reflects the tendency to learn about and adopt innovations within a specific
domain of interest, and, therefore, taps an innovativeness more specific to an area of
interest (Citrin et al., 2000). Gatignon and Robertson (1985) found little overlap in
innovativeness across domains or product categories suggesting that innovation is
fairly product or domain specific. And, domain-specific measures of innovativeness
have yielded useful predictions as far as the adoption of innovations by consumers
is concerned (Goldsmith and Hofacker, 1991; Hirschman, 1980b).
Domain-specific opinion leadership is a concept (construct) that is related to
domain-specific innovativeness. Dickerson and Gentry (1983) identified the
importance of opinion leaders in the diffusion process when studying
the adoption of home computers. Two decades later, the personal computer is
still at the center of the computing environment as per the internet, and some
suggest that opinion leadership may still be significant (O’Cass and Fenech, 2003).
In addition, opinion leadership has been associated with early adopters of
electronic shopping technology, such as videotex (Korgaonkar and Moschis, 1987;
Eastlick, 1993). In this way, we suggest that a domain-specific measure of opinion
leadership represents a viable proxy for domain-specific innovation, and, as such,
may be an indicator of internet or e-banking adoption. We expect that internet
users who are opinion leaders on internet-related issues will utilize online banking
via the world wide web (i.e. innovators) and accept the (perceived) risks associated
with using this technology.
H2.1. Opinion leadership in internet processes and issues will be positively related
with online banking adoption.
H2.2. Opinion seeking behavior in internet processes and issues will be inversely
(negatively) related to online banking adoption.
IJBM Internet/technology self-efficacy and experience
23,2 In the TAM tradition (see earlier discussion), self-efficacy with respect to
internet-related tasks can be an important factor in considering whether or not a
new process is adopted (O’Cass and Fenech, 2003). Davis et al. (1989) and Venkatesh
and Davis (1996) suggest that self-efficacy is an antecedent of perceived ease-of-use
and object use-ability. Translated to computer and internet use, computer-related
182 self-efficacy is a natural precursor to using the internet for commerce (Rampoldi-Hnilo,
1996; Maitland, 1996). As alluded to earlier, Wang et al. (2003) found computer
self-efficacy to have an indirect effect on consumer intentions to use internet banking
systems. Perceived self-efficacy refers to the beliefs in one’s capability to organize and
execute the courses of action required to produce a given accomplishment or outcome
(Bandura, 1997a), and originates from various sources including performance
accomplishments, vicarious experience, verbal persuasion, and psychological states
(Bandura, 1997b). In the case of computer-related self-efficacy, internet experience is
likely important in understanding how self-efficacy influences e-shopping and/or
e-banking. As O’Cass and Fenech (2003) point out, when internet users have
accumulated sufficient personal experience via their adoption of computer technology,
it creates a belief in their ability to use the internet for commercial purposes. Applied to
the online banking scenario, we propose
H3.1. The extent of internet users’ web experience will positively influence online
banking adoption.
H3.2. Internet users’ intensity of internet use will positively influence online
banking adoption.
H3.3. Internet users’ comfort with internet technology will positively influence
online banking adoption.

Type of web/internet use

With respect to online shopping, Moschis et al. (1985) state that, whatever the delivery
method and location of access, internet shopping will need to be compatible with
internet-user lifestyles, experiences, and buying habits if it is to be adopted. This belief
has been confirmed in the area of internet banking specifically as researchers have
found positive relationships between perceptions of convenience and the use of internet
banking (Gerrard and Cunningham, 2003; Polatoglu and Ekin, 2001). Overall,
compatibility is the degree to which consumers perceive an innovation to be consistent
with their needs, values, past experiences, and routines (Rogers, 1995; Tornatzky and
Klien, 1982). Research suggests that compatibility has a large and direct positive
impact on purchase intentions (Holak and Lehmann, 1990), and that, from a consumer’s
perspective, retailing technology is most convenient when it matches shopping and
media habits (Burke, 1997). Internet retailing processes need to provide users with real
benefits and not just an alternative retail environment (O’Cass and Fenech, 2003).
Over three decades ago, behavioral shopping research suggested that consumer
shopping motivations could be thought of as the personal purposeful seeking of
solutions to needs. In this way, transactions are thought to incorporate a social
experience, enabling consumers to interact with others outside the home environment
(Tauber, 1972). Bellenger et al. (1977) classified consumers into two groups they termed
“recreational” and “economic” shoppers. Under the Bellenger et al. (1977) typology, Consumer
economic shoppers do not necessarily search for value and shop out of necessity. innovativeness
Recreational shoppers are not after discounts; instead, these shoppers seek-out the
atmosphere and services associated with more prestigious stores (Williams et al., 1985).
The conceptual framework of the recreational versus economic shoppers was refined in
the 1980s and 1990s when researchers contrasted between consumers who see
shopping in purely utilitarian terms and those who have hedonistic associations with 183
the activity (Babin et al., 1994; Batra and Ahtola, 1991; Baumann et al., 1981). Put
another way, shopping may involve both instrumental and experiential outcomes
(Crowley et al., 1992).
As far as the transaction-oriented task of online banking is concerned, the activity
seems more closely related to purposeful and efficient utilitarian approaches to seeking
and using commercial information than to hedonic, experiential, and self-expressive
commercial activities. That is, online banking benefits appear functional and economic
in nature and likely suit utilitarian internet users who regard internet use as a form of
work, or a necessary means of serving their functional ends.
H4.1. Internet users’ “utilitarian” internet use will be positively related to online
banking adoption.
H4.2. Internet users’ “hedonistic” internet use will be negatively related to online
banking adoption.

Demographic characteristics
As noted earlier, personal characteristics, like socio-demographics, have also been
widely used to profile innovators. Household income, education, and age are the most
widely adopted identifiers for innovators (for a review on personal characteristics and
innovation research see Im et al., 2003). In the area of internet banking specifically,
Mattilia et al. (2003) found that household income and education predicted whether or
not consumers in Finland adopted internet banking, and Sathye (1999) indicated that
young, educated, and wealthy consumers were among those most likely to adopt to
internet banking in Australia. Although some research indicates that demographic
effects are weak (Ostlundt, 1974), consumer innovators are generally thought to have
higher levels of income and education, and are younger (Im et al., 2003). Therefore, we
establish the following hypotheses for the adoption of online banking:
H5. Personal characteristics will influence online banking adoption.
H5.1. Household income levels will be positively related to online banking adoption.
H5.2. Education levels will be positively related to online banking adoption.
H5.3. Age levels will be negatively related to online banking adoption.

Research methodology
Data collection
We recruited 349 participants from three college campuses in the eastern United States.
The participants represented a wide variety of demographic segments with varying
IJBM computer expertise and consisted of professionals participating in certificate courses
23,2 and undergraduate or graduate students taking business courses. Our sample
represented a cross-section of age, gender, income, and education. The male to female
distribution was 40.4 and 59.6 percent, respectively. Respondents’ age ranged from
19 to 48 years with an average of 26. Roughly half (54.5 percent) of our respondents
were 23 years of age or younger, 41.5 percent were in the Generation-X age range
184 (between 24 and 38 years), and four percent were older than 38 years. In terms of
education, 12.2 percent of the respondents had post-graduate education, 45.2 percent
held graduate degrees, 33.3 percent held undergraduate degrees, and 9.3 percent had
some undergraduate education. Finally, in terms of household income, roughly a fifth
(19 percent) reported household incomes of less than US $20K, 36.7 percent reported
incomes between $20K and 50K, 28.7 percent reported incomes between $50K
and 100K, and the remaining 15.6 percent reported household incomes of more than
The use of business school students as surrogates might raise some issue of
external validity. However, (Gordon et al., 1986), Hughes and Gibson (1991) point out
that the suitability of students as surrogates depends on case-specific circumstances.
The use of students can show external validity providing the students’ profiles and
performances are similar to the studied population. While the use of a student sample
limits the generalizability of our research, this group does represent web-educated and
computer-skilled consumers. And, both of these characteristics are requirements for
internet and online banking use. Computer users who are not experienced in using their
browser or feel uncomfortable with the internet will be less likely to use the web for
commercial purposes.
Our survey instrument was administered on the internet. Specifically, subjects were
instructed to go to a particular website that was constructed for the purposes of this
study and resided on a University server. The website included the survey, and, upon
entering the site, respondents were provided with appropriate instructions. Subjects
were asked to complete some simple tasks in order to ensure computer/internet
proficiency. In the event that a subject could not complete these tasks, he/she did not
participate further in the study. In this way, we controlled for web proficiency among
respondents as research has shown that expertise and proficiency influence the use of
technology (Novak et al., 2000; Ghani and Deshpande, 1994).
Every respondent saw the same website and questionnaire, and all respondents had
the same information to guide them. The survey items dealt with diffusion of
innovation, internet attitudes, general internet usage issues, and demographic
characteristics (see forthcoming discussion). After filling-out and submitting the
questionnaire online, respondents were shown a “thank you” page and contact
information for a debriefing of the study.

Operationalization of measures
Adoption measure. Following Rogers (1995) innovation diffusion theory, the logic
implied throughout the paper suggests that the extent to which consumers adopt or use
the internet to bank online indicates the extent to which the internet – as an innovation –
has been “diffused”. The adopter/non-adopter category has been used in prior online
shopping research (Eastlick and Lotz, 1999; Venkatraman, 1991; Shim and Drake, 1990).
In traditional TAM research, the dependent variable is actual usage although some have
utilized measures of behavioral intention (Liao et al., 1999; Wang et al., 2003). Consumer
Thus, adoption of the web for banking was measured via a yes/no response to the innovativeness
question: “Do you have an online banking account?” Whilst this is a limited behavioral
measure, we deem it acceptable as it taps the actual behavior in which we are interested.
Consumer innovativeness. Six items measuring general marketplace opinion
leadership were used to represent innate consumer innovativeness. In a departure from
psychology-based research that incorporates innate consumer innovativeness, our 185
research is not focused on personal traits per se as these traits are difficult to link to
marketing campaigns. Instead, we are interested in a construct and/or measure that
can more easily be linked to marketing strategy and therefore used general or overall
marketplace opinion leadership as a proxy for innate consumer innovation (see earlier
discussion). The specific measure we used is based on the innovation adoption or
leadership scale by Feick and Price (1987). This well-known scale is often referred to as
the “Market Maven” scale. One of the advantages of the scale is that it has been shown
to be independent of socioeconomic and demographic profiles, and persons identified
as “Market Mavens” are known to influence a wide range of actions and reactions on
behalf of consumers (see Appendix). The six items, each measuring a perception on a
seven-point scale anchored by strongly agree/disagree, were combined. Cronbach’s
alpha for the six scale items was 0.89.
To represent domain-specific or actualized innovativeness (internet-related,
domain-specific consumer innovativeness specifically), we used six items that assess
both internet opinion leadership and internet opinion seeking behavior. Scale items
developed originally by Reynolds and Darden (1971) were adopted for this purpose. Four
items represented opinion leadership and had a Cronbach alpha of 0.93, and two items
represented opinion seeking and had an alpha of 0.78. Although we are predicting
opinion leadership and opinion seeking to have opposite effects (positive and negative,
respectively) on the adoption of e-banking procedures, the two variables are generally
thought to be distinct constructs. For example, there are likely opinion seekers who are
not opinion leaders (Feick et al., 1986; Flynn et al., 1996). At the same time, however, there
may be some overlap across the two variables as, for instance, there are likely opinion
leaders who are also opinion seekers because of their interest in the domain.
We conducted an exploratory factor analysis to assess the discriminate validity of
the multi-item innovativeness measures. Utilizing principle components analysis with
varimax rotation, we found that the scale items loaded according to three factors: the
dimension of general marketplace leadership that represents innate consumer
innovativeness, and the measures of internet opinion leadership and opinion seeking
that both represent domain-specific or actualized consumer involvement.
All measurement items aligned with their respective factors, with no cross-loadings
exceeding 0.21. Eigenvalues were 3.9 and 3.3 for general market leadership and
internet opinion leadership, respectively, and 1.7 for internet opinion seeking (Table I).
In sum, the results appear to demonstrate satisfactory levels of reliability and validity.
Self-efficacy-related measures. In order to assess respondents’ self-efficacy per the
internet, we relied on three measures:
(1) web usage intensity;
(2) length of web usage; and
(3) technology comfort.
IJBM Factor 1 Factor 2 Factor 3
23,2 General market Internet opinion Internet opinion
leader leader seeker

My friends think of me as a good source of

information when it comes to new products or
186 sales 0.83789
Like helping people by providing them with
information about many kinds of products 0.83594
I like introducing new brands and products to my
friends and co-workers 0.81456
If someone asked where to get the best buy on
several types of products, I could tell him or her
where to shop 0.81114
People ask me for information about products,
places to shop, or sales 0.80450
Think about a person who has information about
a variety of products and likes to share this
information with others. This person knows
about new products, sales, stores, and so on
(e.g. websites, etc.), but does not necessarily feel
he or she is an expert on one particular product.
How well would you say this description fits you? 0.65247
My friends and co-workers come to me more
often than I go to them for information about the
internet and/or website(s) 0.91743
I feel that I am generally regarded by my friends
and co-workers as a good source of advice and/or
information about the internet 0.90787
My friends and co-workers often ask my advice
about the internet and/or particular website(s) 0.87895
I sometimes influence the website(s) that my
friends and co-workers visit 0.86709
I often seek out the advice of my friends and
co-workers regarding the internet 0.89187
My friends and co-workers usually give me good
Table I. advice as far as the internet is concerned 0.88760
Exploratory factor Variance Explained 3.893 3.313 1.672
analysis Coefficient a 0.89 0.93 0.78

Using the internet for commercial purposes requires web-browser action. Thus, two
six-point items were used to gauge the intensity of web-browser usage: the first item
asked about the average time of use (responses ranged from using the internet less
than an hour a week to using the internet over 40 hours a week), and the second asked
how often a respondent used a web-browser per day (responses ranged from more than
9 times a day to once a month; see Appendix). The two intensity items were
significantly and positively correlated ðr ¼ 0:51; p , 0:00Þ and were combined to form
the web usage intensity variable. Length of time that someone has been using the
internet is a known indicator of expertise (Novak et al., 2000). To measure length of
web usage we utilized an item that asked how long the respondent had been using the
internet (responses ranged from “less than 6 months” to “seven years or more”).
Technology comfort was measured by three items utilizing a five-point scale Consumer
(anchors were 1 ¼ very uncomfortable and 5 ¼ very comfortable). The three items innovativeness
measured respondents’ comfort in regard to
(1) using computers in general;
(2) using the internet; and
(3) their satisfaction with their current skills for using the internet. 187
All items for the three measures representing self-efficacy (web usage intensity, web
usage length, and technology comfort), were taken from the Ninth WWW User Survey
sponsored by the Graphic, Visualization, and Usability (GVU) Center at the Georgia
Institute for Technology (1998). The survey was intended to investigate behaviors as
well as attitudes towards the internet in general. GVU ran the survey as a public
service, and the survey was endorsed by the World Wide Web Consortium, which
exists to develop common standards for the evolution of the web (Novak et al., 2000).
Utilitarian versus hedonic internet use. Type of internet use was measured by
asking respondents to rate their web usage in terms of usage experience: utilitarian
information searchers/collectors versus using the web for self-expression and fun
(hedonic use). Two items from the Ninth WWW User Survey (1998) were used to
measure type of internet use. The first item measured “using the internet for
information search” and the second item measured “using the internet for self
expression” (the items had a four-point response format – 1 for “never” through 4 for
“most of the time”).
Based on TAM literature, three demographic characteristics were included in our
analysis as independent variables: education, income, and age (see Table II). Given our

Dimension Segment Overall sample n/(percent)a t-valueb p,

Gender Female 195/59.5 1.00 (325) 0.32

Male 132/40.4
Age ,21 years 46/13.2 2.90 (347) 0.004
21 years 54/15.5
22-23 years 90/25.8
24-28 years 81/23.2
29-38 years 65/18.3
.38 years 14/4.0
Education Post-Graduate degree 32/12.2 2.25 (343) 0.02
Graduate degree 115/45.2
Undergraduate degree 156/33.3
Some college 42/9.3
Household income , US$10,000 16/6.8 2.54 (235) 0.01
US$10-20,000 29/12.2
US$20-30,000 35/14.8
US$30-50,000 52/21.9
US$50-75,000 44/18.6
US$75-100,000 24/10.1
. US$100,000 37/15.6
Notes: Overall sample size n ¼ 349; acells show number and percentage of sub-sample; and bcells Table II.
show t-value and degrees of freedom in parenthesis for the comparison between groups Demographic information
IJBM sample, we developed the following categories for the education and income measures:
23,2 education was classified by four categories (post-graduate degree, graduate degree,
undergraduate degree, and some college experience) and household income was
classified utilizing seven categories (, US$10,000; $10-20K; $20-30K; $30-50K;
$50-75K; $75-100K or . $100,000).
A correlation matrix of all variables is provided in Table III. As seen in the table, the
188 correlations between the multi-item constructs of internet opinion leadership,
technology comfort, and web expertise are reasonably strong and significant. These
findings are not surprising as it can be expected that web usage will increase the
comfort level of users ðr ¼ 0:44; p , 0:01Þ: Furthermore, internet opinion leaders are
likely people who use the web often ðr ¼ 0:38; p , 0:01Þ and feel comfortable with the
technology ðr ¼ 0:41; p , 0:01Þ:

Analysis and results

Logistic regression was used in the analysis since the dependent variable is a
dichotomous variable (online account/no online account) and the probability of
purchase must lie between 0 and 1 (Press and Wilson, 1978). Logistic regression
assigns purchase probabilities between 0 and 1, whereas linear regression would
predict probability of purchase of less than 0 and greater than 1. The a priori
probabilities for the logistic regression models were calculated based on adoption
behavior as the proportion who actually had an online banking account.
Three measures of model performance are available. Using the standard
Lehmann-Chernoff goodness-of-fit test, model chi-square is compared to
chi-square(1) (Lehmann, 1959). For our model utilizing adoption as the dependent
variable and the 11 independent variables noted above (“Market Maven,” opinion
leadership and seekers, comfort with technology, web intensity, length of time using
the web, utilitarian and hedonic web use, education, income, and age), chi-square was
greater than chi-square(1) leading to the rejection of the hypothesis that there is no fit
ðp , 0:05Þ: Next, the p-value associated with model chi-square is examined (Table IV).
For our model, the chi-square value is significant ðp , 0:01Þ: Finally, model
classification performance is examined. The number of adopters correctly classified is
greater than 80 percent, leading to the conclusion that classification performance is
acceptable. Based on these three model performance criteria, we conclude that, overall,
model performance is acceptable. The independent variables were considered together
since, for any specific adopter, these characteristics come into play simultaneously in
influencing adoption behavior. To identify significant coefficients the Wald test was
applied by comparing coefficient chi-square to chi-squared(1) (Engel, 1984). If the
coefficient chi-square is greater than chi-square(1), then the hypothesis that
the coefficient is not significant is rejected ðp , 0:05Þ:
Personal innovativeness characteristics are all significantly related to online banking
adoption. The innate measure of general market innovation (“Market Maven”), however,
shows an unexpected relationship. Contrary to H1, general market innovation has a
negative impact on adoption. Domain-specific innovativeness per internet issues, on the
other hand, supports H2 (both 2.1 and 2.2) as opinion leadership and opinion seeking
positively and negatively, respectively, relate to online banking adoption.
With regard to internet self-efficacy, the three variables of technology comfort and
length and intensity of web usage reveal the expected directional (i.e. positive)
MKT Opinion Opinion Tech Web Web
Maven leading seeking comfort intensty long Educate Income Age Utilitarian Hedonistic

MKT Maven 1.000

leading 0.345* 1.000
seeking 20.225* 20.256* 1.000
comfort 0.038 0.412* 2 0.045 1.000
intensity 0.056 0.382* 2 0.102*** 0.441* 1.000
Web long 0.040 0.170* 0.116** 0.178* 0.290* 1.000
Educate 0.024 0.038 2 0.081 0.027 0.177* 0.082 1.000
Income 20.015 20.060 0.013 0.139** 0.131** 0.162** 0.183* 1.000
Age 20.069 20.050 0.026 2 0.080 0.054 20.066 0.303* 0.288* 1.000
Utilit-arian 0.111** 0.264* 0.017 0.303* 0.285* 0.143* 2 0.086 0.106 20.008 1.000
Hedonistic 0.053 0.250* 2 0.137** 0.147* 0.191* 0.062 0.022 2 0.170* 20.104*** 0.104*** 1.000
Mean 4.59 3.26 2.70 3.39 3.60 2.70 2.40 4.81 25.81 3.73 2.56
Std 1.32 0.95 0.83 0.73 1.07 0.71 0.82 2.21 5.72 0.46 0.89
N 336 329 329 328 326 341 345 237 326 335 335
Notes: *p , 0:01; **p , 0:05; and ***p , 0:10


standard-deviation and
Table III.
IJBM Construct Estimate Standard error Wald chi-square Pr . ChiSq
Intercept 29.4711 2.4960 14.3979 0.0001
MKT Maven 20.3175 0.1422 4.9876 0.0255
Opinlead 0.8394 0.2492 11.3455 0.0008
Opinseek 20.4120 0.2225 3.4303 0.0640
190 Techcomf 0.1923 0.3325 0.3346 0.5630
Webintensity 0.4788 0.2110 5.1514 0.0232
Weblong 0.1816 0.2756 0.4341 0.5100
Educate 20.3672 0.2500 2.1570 0.1419
Table IV. Income 0.2105 0.0848 6.1663 0.0130
Logistic regression of Age 0.0118 0.0293 0.1635 0.6860
online banking on Utilitarian 1.6342 0.5263 9.6396 0.0019
consumer characteristics Hedonistic 20.4361 0.2130 4.1902 0.0407

relationships to online banking adoption. Unexpectedly, however, only intensity of

web usage is significant ðp , 0:05Þ: Only H3.2, therefore, is fully supported.
For the two “type of web use” measures, results are as predicted in H3.1 and 3.2:
utilitarian information search behavior is positively related ðp , 0:01Þ and hedonistic
use (fun, self-expression, etc.) is negatively related ðp , 0:05Þ to online banking
Findings involving the demographic characteristics both supported and failed to
support the hypotheses. Contrary to H4.1 and 4.3, neither education nor age
significantly affected online banking adoption. In support of H4.2, on the other hand,
income is positively and significantly related to online banking adoption ðp , 0:05Þ:

This study examines the adoption of e-banking and how personal innovation attitudes,
internet-related self-efficacy, type of web use, and demographic characteristics affect
adoption. Rooted in the TAM theoretical tradition, the empirical model tested herein
not only provides important insights toward understanding and explaining the
consumer-based phenomenon of e-banking, but also serves to empirically evaluate
the TAM framework in this emerging and important context. Overall, the model
supports the TAM perspective in that prospective users’ overall feelings or attitudes
toward using an on-line banking system represent significant determinants as to
whether or not they will ultimately use the internet-based banking procedure. And, in
contrast to the previous internet banking research utilizing the TAM framework
(Wang et al., 2003), our study utilized an actual measure of e-banking adoption versus a
measure of (behavioral) intention to use the technology. Next, we recap our findings.
Consistent with extant research, we predicted and found that domain-specific
or actualized consumer innovation significantly and positively affects the adoption of
online banking, as does the self-efficacy-related measure of web use intensity,
utilitarian-based web use (in contrast, the hedonic-based use measure had a predicted
negative effect), and income. Variables that did not affect the e-banking adoption
process, and, as such, did not support prior predictions, include the self-efficacy-related
measures of technology comfort and length of web usage, and the age and education
demographic characteristics. In direct contrast to predictions, the innate (general)
consumer innovation variable had a significant negative effect on e-banking adoption.
Managerial implications Consumer
Consumer innovation. Our findings suggest that levels of consumer innovation do innovativeness
matter when it comes to adapting and utilizing e-banking products and procedures.
As far as domain-specific (internet) innovation is concerned, consumers who are
internet opinion leaders are significantly more likely to adopt or utilize online banking.
And, conversely, those consumers who are internet opinion seekers are significantly
less likely to utilize the online technology. These findings support a well established 191
stream of marketing research suggesting that those who have knowledge and therefore
opinions about a particular domain (product or product class, etc.) – and are willing to
share their opinions with others – are likely to be (early) adopters and users of
commercial innovations (Dickerson and Gentry, 1983; Gatignon and Robertson, 1991;
Rogers, 1995). Furthermore, the findings suggest that online banking as a technology
is likely still in the earlier stages of adoption (e.g. innovators, earlier adopters
and earlier majority), and, as such, will likely see more adopters in the years ahead
(e.g. late majority and laggards) (Rogers, 1995). In trying to understand who does and
does not use or adopt e-banking systems and processes, banks and their subsidiaries
who offer e-banking products need to recognize and appreciate the importance of
internet-specific consumer innovation levels and characteristics.
In addition to levels of consumer innovation, our research also suggests that the
type of consumer innovation matters when it comes to understanding the adoption and
utilization of e-banking systems and processes. That is, we found disparate results
across our two consumer innovation measures. In a rather unexpected yet intriguing
finding, the innate or general consumer innovativeness measure had a significantly
negative effect on online banking. This finding is in direct contrast to the finding
involving the domain-specific consumer innovation variable. Apparently, consumers
who are general or overall marketplace opinion leaders (i.e. Market Mavens) are
significantly less likely to use or adopt online banking. Had the innate consumer
innovativeness variable simply failed to have a significant effect on e-banking
adoption, the finding and subsequent interpretation would be far less clear and/or
engaging. Yet, the fact that this particular form of consumer innovation had a
significantly negative effect on online banking adoption levels perhaps suggests
something more. Among other things, this finding may:
(1) support the notion that online shoppers are somehow distinct compared with
traditional non-online (i.e. brick-and-mortar) shoppers (Lokken et al., 2003);
(2) highlight the distinct or unique nature of purchasing financial (versus
non-financial) products (Beckett et al., 2000; Javalgi and Dion, 1999; Moskowitz
and Krieger, 2001); and
(3) some combination thereof whereby financial services purchased online are
inherently unique (Ramaswami et al., 2000-2001).
Recent qualitative research offers additional insight on why innate consumer
innovativeness is inversely related to online banking adoption. That is, consumers do
not view online banking as an exciting innovation (Sarel and Marmorstein, 2003).
Even active users do not communicate their experiences with others. This is in sharp
contrast to the communicative and persuasive behavior of Market Mavens who are
depicted as “marketplace influencers” and whose preponderance is not necessarily
based on knowledge or expertise in particular product categories, but, instead, on more
IJBM general knowledge and experience with markets (Feick and Price, 1987, p. 83). Active
23,2 e-bankers view online banking as their primary method of banking and as a natural
extension of their online world. They appreciate the control and convenience of online
banking but view banking as noticeably less valuable than other online services.
The domain-specific innovativeness of online bankers has helped them get the most
benefit from a relatively unexciting service.
192 In the end, the findings across both the innovation variables suggest that, in terms
of consumer innovation characteristics, the selling and/or targeting of e-banking
products is a fairly unique and/or distinctive proposition as compared with other more
general (traditional) consumer-oriented products and markets. The prominent role of
the internet domain in online banking adoption is further emphasized by the results
regarding web use and intensity.
Web use and intensity. Together, the findings pertaining to the self-efficacy-related
measure of web use intensity and the two measures of web use (i.e. utilitarian-and
hedonic-based) suggest a rather distinct portrayal of e-banking patrons. That is, these
consumers believe in and draw on their abilities to use the internet in a concentrated if
not determined manner for specific purposes and do so intensively. In this way, the
internet serves as an essential and fundamental tool to accomplish specific goals and
tasks. Not only must the “core” online banking product adhere to this user (usage)
platform, but the entire or “augmented” online banking product as well (the augmented
product includes the core or fundamental product as well as other peripheral aspects of
the product offering including facilitating and supportive products, image, marketing
communications, etc. (Grönroos, 1990)).
The need for online banking products to be purposeful is also supported by the
recent qualitative research by Sarel and Marmorstein (2003) that tries to ascertain the
reasons for non-adoption. The researchers interview only those who use the internet
regularly and characterize subjects as active, light or non-users of online banking.
Those characterized as light users do not view online banking as a significant
enhancement to their banking capabilities. Most light users have not even tried the bill
payment feature of online banking, whereas most active users view this feature as the
greatest benefit to banking online. Active users are those that had searched for the best
mix of services, rates and fees and then made best use of the features of convenience,
control and integration with other financial services. Web use intensity and utilitarian
internet helps explain both the empirical and qualitative results.
Demographic factors. Interestingly, the only demographic characteristic to
significantly affect the adoption of e-banking in our study was income. In a finding
common across both innovation- and internet-based marketing studies (Im et al., 2003
and Kolodinsky and Hogarth, 2001, respectively), income was found to positively affect
the use or adoption of online banking. As an object variable (characteristic), income
serves as a powerful and straightforward means by which marketers can target
potential e-banking users.

Limitations and future research

As with the findings reported in any study, the findings reported here may be limited
to the population and/or type of product investigated in our research. Internet or online
banking, for instance, is only one of the various types or forms of e-banking products
available (see earlier discussion). Thus, the relationships found in this study may or
may not differ according to whether consumers are using telephone banking, EFT, or Consumer
direct bill payment (Kolodinsky and Hogarth, 2001). Our results may generalize to innovativeness
telephone banking and EFT as these products/systems, like online banking, require an
active role on behalf of consumers in using the product. With direct bill payment, on
the other hand, consumers need only set up the process initially and then monitor it on
a semi-regular basis.
In addition to replicating our findings across different e-banking products, future 193
research might also address aspects of marketing strategy beyond the product itself.
Promotional and communication issues, for instance, are likely important in terms of
understanding the relationship between consumers and e-banking. What promotional
messages are effective in acquiring new customers? And, what forms or types of
communications are necessary and effective in maintaining existing customer
relationships? As an emerging and consequential commercial phenomenon, e-banking
can represent both a challenge and an opportunity for marketers of financial products
and services. Those marketers armed with a thorough understanding of e-consumers
will be the most competitive.

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Diffusion of innovation – online banking variable. Adoption of the web for banking was
measured via yes/no response to the question: “Do you have an online banking account?”
Personal consumer innovation variables. Innate (general) marketplace leadership – “Market
Below are a number of statements. Please click on the response that most accurately
describes you. Please assign a rating on a scale from 1 to 7 based on which number you consider
to be the most appropriate for yourself where 1 ¼ “the description does NOT fit me at all” and
7 ¼ “the description fits me VERY well.”
My friends think of me as a good source of information when it comes to new products or
I like helping people by providing them with information about many kinds of products.
I like introducing new brands and products to my friends and co-workers.
23,2 .
If someone asked where to get the best buy on several types of products, I could tell him or
her where to shop.
People ask me for information about products, places to shop, or sales.
Think about a person who has information about a variety of products and likes to share
this information with others. This person knows about new products, sales, stores, and so
198 on (e.g. web sites, etc.), but does not necessarily feel he or she is an expert on one particular
product. How well would you say this description fits you?

Domain-specific (internet) or actualized innovation – opinion leadership. All questions were

administered on a five-point scale: “Please click on the response that best represents your
agreement with the following statements [Strongly Agree – Agree – Neutral – Disagree –
Strongly Disagree]”
(1) My friends and co-workers come to me more often than I go to them for information
about the internet and/or web site(s).
(2) I feel that I am generally regarded by my friends and co-workers as a good source of
advice and/or information about the internet.
(3) My friends and co-workers often ask my advice about the internet and/or particular
(4) I sometimes influence the web site(s) that my friends and co-workers visit.

Domain-specific (internet) or actualized innovation – opinion seeking. All questions were

administered on a five-point scale: “Please click on the response that best represents your
agreement with the following statements (strongly agree – agree – neutral – disagree –
strongly disagree)”
(1) I often seek out the advice of my friends and co-workers regarding the internet.
(2) My friends and co-workers usually give me good advice as far as the internet is

Self-efficacy-related (experience) measures

Technology comfort level.
(a) How comfortable do you feel using computers in general?
Very comfortable
Somewhat comfortable
Neither comfortable nor uncomfortable
Somewhat uncomfortable
Very uncomfortable
(b) How comfortable do you feel using the internet?
Very comfortable
Somewhat comfortable
Neither comfortable nor uncomfortable
Somewhat uncomfortable
Very uncomfortable
(c) How satisfied are you with your current skills for using the internet? Consumer
Very satisfied – I can do everything that I want to do innovativeness
Somewhat satisfied – I can do most things I want to do
Neither satisfied nor unsatisfied
Somewhat unsatisfied – I can’t do many things I would like to do
Very unsatisfied – I can’t do most of the things I would like to do 199
Length of internet use. How long have you been using the internet (including using e-mail, ftp,
gopher, etc.)?
Less than 6 months
6-12 months
1-3 years
4-6 years
7 years or more

Web usage intensity.

(a) On average, how many hours a week do you use your web-browser?
Less than 1hour
1 to 5 hours
6 to 10 hours
11 to 20 hours
21 to 40 hours
Over 40 hours
(b) On average, how often do you use your web-browser (e.g. netscape communicator, internet
explorer, etc.)?
More than 9 times a day
5 to 8 times a day
1 to 4 times a day
A few times a week
Once a week
Once a month

Type of web use

Utilitarian. We would like to explore the extent to which you use the internet for specific
To what extent would you say you use the internet to search for specific information? Would
you say. . . Most of the time ¼ 4; Sometimes ¼ 3; Seldom ¼ 2; Never ¼ 1.
Hedonistic. To what extent would you say you use the internet to express yourself: to help
you convey the right impression to others (either on- or off-line)? Would you say. . . Most of the
time ¼ 4; Sometimes ¼ 3; Seldom ¼ 2; Never ¼ 1.