As with any new technology, e-banking too presents certain problems for banks. This paper attempts to highlight the difficulties encountered by bankers in using e-banking services. The survey data used in this research was collected through a questionnaire administered to 192 bankers in northern India. The study brings out two significant difficulties in the use of e-banking, viz., heightened stress and technical bottlenecks. To address these concerns, banks must put in place concrete development plans and a system of controls and security that boost competitiveness and ensure further progress. The paper presents the managerial implications of the results, along with suggestions for future research.

Information technology is fast becoming an important factor in the development of financial services industry, particularly the banking sector. Today, banks are facing a number of important issues like how to take full advantage of the new technologies, how e-banking changes the way customers relate with the service provider, etc. The banking industry has been considerably influenced by the expansion of technology. E-banking channels such as Automated Teller Machine (ATM), phone-banking, tele-banking, PC-banking, Internet banking and mobile banking have found wider acceptance. IT-based distribution channels reduce personal contact between the service providers and the customers, which certainly leads to the complete transformation of traditional bank-customer relationship (Barnes and Howlett, 1998).

As with any new technology, e-banking too presents certain problems. E-banking is a mixed blessing in the form of increased risk, the level of confidence felt by the consumers, and the problem of blending it with the physical system. The problems faced by bankers in harnessing this new technology have several manifestations such as operational, security, reputational, legal and cross-border risks. Some other factors like data integrity, confidentiality, authenticity and privacy issues also place stress on the young e-banking system. The security and privacy aspects also continue to remain major issues, especially in the case of business people. Lack of awareness is one of the biggest roadblocks for successful e-banking. So far, the government has not formulated adequate cyber laws and foolproof legal framework for e-banking to protect the interests of the customers. Lack of adequate infrastructure is another hurdle for e-banking in India. Besides, many Indians have not taken to e-banking due to resistance to change.

Introduction of new technology causes disturbance in the organizations and to the individuals within those organizations, as older technologies and systems are replaced by the newer ones (Davis et al., 1989). The perception of bankers towards banking technologies is a very crucial element in the development of successful e-banking (Lymperopoulos and Chaniotakis, 2004). If the bank staff considers e-banking as a user-friendly and convenient channel that decreases costs and if its adoption does not have any effect on their roles, then they adopt it (Nath et al., 2001). On the other hand, if they perceive e-banking as a threat to their jobs and a way to lose customers, then they resist its adoption (Mols, 2001). Bank staff’s resistance to technology adoption (Chan and Lu, 2004; and Constantine and Chaniotakis, 2005). One of the important barriers to adoption of e-banking is the attitude of the service providers and customers. Absence of user involvement, lack of training, lack of understanding, technical difficulties and perceived complexity are considered as the main causes of user resistance (Chen, 1999; and Liao et al., 1999). Moreover, users may not accept new technologies if they find that the technologies are not compatible with their values, beliefs, and past experiences (Fichman and Kemerer, 1999). Difficulties faced by bankers include lack of awareness of new technologies, deficiencies in computer use, fear of computers, and the low level of technological training among workforce and senior management (Abukhzam and Lee, 2010).

Thus, this paper is an endeavor to study the difficulties faced by bankers in using e-banking. The paper is structured as follows: the next section reviews the literature followed by research methodology. The subsequent section discusses the results of the present study, and the final section offers the conclusion and suggestions.

Bank Management Journal, Indian Banks, Asset Liability Management, Data Filtering, Least Absolute Deviation, Decision-Making Group, Commercial Banks, Ordinary Least Square, Banking Industry, Kenyan Banks, Least Squares Regression, Mutual Fund Industry, Linear Programming, Financial Markets, Capital Required Adequacy Ratio, Public Sector Banks.