A logit analysis of electronic banking in New Zealand

In this paper the competitive landscape of financial institutions is shifting and internet banking is no longer a competitive advantage but a competitive necessity for banks. However, a limited number of empirical studies have been published in the marketing literature about electronic banking. This paper seeks to examine consumers' choices between electronic banking and non‐electronic banking in New Zealand.

The paper shows that the data for this analysis were obtained through a mail survey sent to 1,960 households in New Zealand. The decision to use electronic banking is hypothesised to be a function of service quality dimensions, perceived risk factors, user input factors, price factors, service product characteristics, individual factors and demographic variables such as age, gender, marital status, income, etc. Logistic regression is used to analyse the data. The discrete dependent variable measures whether an individual is an electronic banking or non‐electronic banking user.

The findings in the paper show that the output from the logistic regression indicates that the service quality, perceived risk factors, user input factors, employment, and education are the dominant variables that influence consumers' choice of electronic banking and non‐electronic banking channels.

This paper provides an improved understanding of consumers' choice between electronic and non‐electronic banking. This paper also identifies new relationships, and provides findings that further support, confirm, or contradict previous studies. In addition, it provides insights into the links between electronic banking and consumer decision making, to help provide strategies, recommendations and guidelines for the banking industry.

The paper shows how banks are developing, and utilizing new alternative distribution channels to reach their customers.