Abstract

The goal of this study is to develop and enhance an understanding of Iranian customers' adoption of Internet banking services. Enhancement of Internet banking service adoption is an important strategy in today’s increasingly competitive banking industry. Bank management must identify and improve upon factors that can limit customer adoption. Through a questionnaire, demographic, attitudinal and behavioral characteristics of Internet banking service customers of Saman and Mellat banks from private and governmental sectors are captured. The results illustrate that expectations about service quality are high. The majority of the customers are very willing to use Internet banking services. The security concerns and lack of adequate technological knowledge stand out as being two main obstacles to the adoption of Internet banking. There was also evidence that customers’ age groups and level of education more contributed to explain the respondent's propensity to use Internet banking services. Saman bank was perceived as having a significantly better service portfolio, specifically in regard to making customers aware of its services and offering its attractive incentives in comparison to Mellat bank. The service quality dimensions were found to better meet the overall expectation of customers who patronized Saman bank. Since the majority of the Iranian banks are under the governmental authority; thus, privatization could be useful in enrichment of the Iranian banks' performance.