"Banking The Unbanked",Understanding The Adoption Of Online Banking To Enhance Banking In Pakistan

Information and communication technology has propelled the digital revolution to every walk of human life.The services sector is predominantly shifting from physical to online formats.In this regard,the last decade witnessed a revolution in the banking industry,which resulted in more sophisticated,automatic,and speedier services.Although the developing Asian countries have huge potentials to expand their banking net through online banking,there is sparse literature to understand the factors affecting the low level adoption of online banking,especially with comprehensive and innovative models.Filling the gap and keeping in view the motto of'banking the unbanked masses',this study aims to investigate the factors that contribute to the successful acceptance of online banking by the local populace in developing countries,especially Pakistan.The study uses the framework of Unified Theory of Acceptance and Use of Technology(UTAUT2),augmented by digital literacy and perceived credibility.Furthermore,it borrows from the Hofstede cultural theory(1980)and examines the moderating effects of five cultural dimensions(individualism/collectivism,uncertainty avoidance,power distance,masculinity/femininity,and long-term/short-term orientation)between the relationship of behavioural intentions and usage behaviour.Relying on quantitative methodology,the study collected cross-sectional data through survey methods from 660 bank customers in the four capital cities of Pakistan.SPSS version(20)and Smart-PLS 3.0 software were used for the entire analysis.After the initial screening through SPSS,the final model was tested with 628(representing a 52.3%response)valid responses.The study conducted a confirmatory factor analysis(CFA)to examine the reliability and validity of the constructs.To test the hypothetical relationships in the model,the study chose structure equation modeling(SEM)using partial least square(PLS)estimation through the Smart-PLS software.The study found that digital literacy has a significant direct effect on customers' performance expectancy and effort expectancy.The results of the structure model validated performance expectancy,hedonic motivation,habit,and perceived credibility as the important antecedents of behavioral intentions.The study found no significant impact of efforts expectancy,social influence,facilitating conditions,and price value on customers' behavioural intentions.The cultural dimensions,i.e.,collectivism,uncertainty avoidance,power distance,and time orientation,significantly moderate the effect of behavioural intention over usage behaviour.The study has insightful implications and enriches both theory and practice.The digital literacy could be explored more to understand its direct/indirect effect on behavioural intentions.The study extends the UTAUT2 model and validates the Hofstede cultural theory in a non-Western Asian country,which provides avenues for future academic and industrial research.Moreover,it gives valuable suggestions to the government,central bank,regulatory bodies,commercial and investment banks,policy makers,and other stakeholders to understand the dynamics of online banking and devise their policies accordingly.The study offers recommendations to overcome the issue of low penetration and encourage customers to shift towards online banking.