Abstract

Purpose – The finance industry especially the banking industry has been facing unprecedented atmosphere due to Internet Specialized Bank, P2P financing, mobile banking, etc. Furthermore borrowing and lending task which is the core business of banking can be done by internet without visiting bank. So called new business platform for the banking industry has emerging, and accordingly banks have to find new strategies to survive. Banks need to maintain existing customers by understanding customers’ perceived value and attract new customers. In this research, we investigate the relationship among Internet Banking Use, Trust, Bank Loyalty, Continuity, and Switching Barrier. The variables represent what customers perceive as values regarding banking and what make them to switch banks. Especially switching barriers are analyzed whether they have control effects on customers’ behavior leaving or staying their current bank. By understanding factors affecting customers’ decision making, banks can set up strategies not to lose existing customers and to attract new customers.

Research design, data, and methodology – The first step is to test whether the customers’ perceived value on internet banking affect internet banking use and bank loyalty. The second step is to test trust which consists of system trust and bank trust affect internet banking use affects internet banking use and bank loyalty. The third step is to analyze whether switching barriers for internet banking have control effect on leaving the current or staying. The data was collected by questionnaire and analyzed using SPSS. Demographic characteristics, factor analysis, regression analysis, and 3 step regression analysis were conducted.

Results – All sub-variables of customers’ perceive value, usefulness, ease of use, customization, convenience, is turned out to affect internet banking use and bank loyalty at statistically significant level. Of system trust which consists of two sub-variables, task performance trust and security trust, task performance affects internet banking use and bank loyalty but security trust does not. Three sub-variables of Bank trust, promise keeping, opportunistic behavior, employee trust, affect internet banking use but regarding bank loyalty promise keeping and employee trust affect but opportunistic behavior does not affect bank loyalty. The switching barriers for internet banking are turned out to have control effect on the process from internet banking use to continuity and from bank loyalty to continuity.

Conclusions - The customers’ perceived value on internet banking use are chosen from extant study results. They are usefulness, customization, ease of use and convenience. All the four variables are meaningful regarding internet banking. Regarding trust, customers are still suspicious on security of the system. However customers have confidence in internet banking in terms of tasks. Of bank trust customers believe that banks will keep their promises and the employees are trustworthy but they also think that banks can make decisions for their own benefit when conflicts between customers and bank break out. The switching barriers which consist of three factors, switching costs, difficulties of new environment and uncertainties of new bank, have control effect on switching internet banks. Therefor for banks not to lose existing customers need to make the barriers higher.

The contribution of this study is as follows. First, we found what factors regarding customers’ perceived value on internet banking affect the use. Second the trust regarding internet banking has to be divided into two aspects which are system trust and trust of bank itself. Finally, the switching barriers on internet banking are influential to switching banks and continuity.

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