Toward understanding the importance of trust in influencing Internet banking adoption in Uganda

Abstract

With the increasing popularity of the Internet, financial institutions are seeking ways to utilize this popular medium in an effort to keep up with the changing technological preferences of their customers through innovations like Internet banking services. In Uganda, however, the rate of Internet banking adoption has not risen as strongly as expected due to factors like lack of trust, security, poor perceptions on usefulness and ease of use of the system by the customers, lack of privacy over the Internet and poor attitude towards Internet banking, among others, which has led many to view Internet banking as a very risky undertaking. This study introduces perceived trustworthiness as one of the beliefs that may significantly influence Internet banking adoption and we examine its importance in determining customers’ attitude and behavioral intention towards using Internet banking as the purpose of the study. We conducted a survey by distributing questionnaires to customers of five highly competitive banks in Uganda and collected data from a total of 232 respondents. The results of the statistical analyses using structural equation modeling indicate that the relative importance of perceived trustworthiness of banks was statistically significant as it accounted for 47 percent of variance in predicting customers’ attitude towards Internet banking.