Risks in Internet Banking: Sample Evidence from Idukki District, Kerala

In the banking sector, various electronic delivery channels are increasingly used for delivering products and services at the convenience of customers at low cost. Internet banking is one among them. Internet banking is a product of e-commerce in the field of banking and financial services. The main objectives of this paper are: (1) to understand the profile of Internet banking users in Idukki district; (2) to identify the most widely used application of Internet banking; (3) to analyze various risk dimensions in the usage of Internet banking services; and (4) to understand the influence of demographic variables on various dimensions of risk in the usage of Internet banking. It is found that most of the users are males in the age group of 20 to 40, either employed or businessmen with a monthly income of below 40,000, and educated with an average or advanced level of computer knowledge. The popular Internet banking services among the customers are checking balances, followed by inter-account transfer, payment to other account and e-ticketing. Exploratory Factor Analysis (EFA) revealed that items associated with financial and social risk, security and time risk, and performance risk contribute to the risk perceptions of banking customers.