Reasons barring customers from using internet banking in Iran: an integrated approach based on means-end chains and segmentation

Abstract: The advent of information technology has influenced the banking industry to
a great extent. It has made the banks able to perform their tasks more
effectively. It has also enabled them to offer some of their services
through self-service technologies (SSTs). One of the newest channels
through which these SSTs have been offered is Internet which is broadly
known as Internet banking. When compared to other payment channels,
Internet has seen to offer many advantages both for banks and for
customers. However, only a small portion of Iranian bank customers are
Internet banking users. The purpose of this study is to find out why
Iranian bank customers, in particular, those bank customers to whom
Internet banking services have already been offered are not using Internet
banking. Further more, when non-adopters comprise the majority of the
population, describing all non-adopters as one homogeneous group may not be
accurate. Hence, the second objective of this study is to find the
homogeneous groups (segments) of Internet banking non-adopters.

For this purpose, Association Pattern Techniques (APT) was applied which is
a two-stage method and has its foundations in the mean-end theory. In the
first stage, 32 Iranian bank customers were interviewed in-depth using
laddering interviewing technique. Based on these interviews, literature
review, and the approach of APT, a questionnaire was developed. This
questionnaire was distributed among the customers of EN Bank in 12 branches
of the province of Tehran. Totally 507 questionnaires were collected.

The analysis results of the collected data indicate that the main reasons
which bar these customers from using Internet banking are lack of knowledge
about Internet banking, lack of trust in the system, and limited Internet
banking services. Further analysis revealed that different customers indeed
had different reasons for not using Internet banking. The cluster analysis
revealed five segments of Internet banking non-adopters, namely, Skeptics,
Traditional clients, The Distrustful, The Time-conscientious, and The Cost-
sensitive. The description of each segment and respective suggestions for
each segment are provided.