Demographics and perceptions as determinants of consumers' use of electronic banking

Australian banks, pressured by competitors and smaller margins have been impelled to introduce alternative methods of service delivery. Electronic banking (ATMs and EFTPOS) is replacing over the counter banking as the primary mode of contact between the customer and the bank. For banks to increase service levels and patronage of electronic banking they must assess consumer characteristics, especially demographics and perceptions of quality affecting consumer behaviour. To this end, this paper investigates the frequency and type of electronic banking transactions and the relationship between consumer demographics, perceptions of service quality and the use of electronic banking services (specifically, ATMs and EFTPOS) by Australian consumers. Perceptions of service quality were measured using the SERVQUAL model; this comprises five components: accessibility, ease of use, reliability, responsiveness and security. Quantitative data was obtained from 100 respondents by mall-interception and 102 by telephone interviews. Statistical analysis revealed significant correlations between electronic banking use and demographic variables (eg. age and income) and components of the SERQUAL model (eg. accessibility, ease of use, and security). These variables collectively explained approximately 60% of the variability in electronic banking use. The findings imply that banks should jointly promote ATMs and EFTPOS (they attract the same target segments), increase the number of ATMs, improve consumer's perceptions of ease and security of use.