Role of Network Externalities and Innovation Characteristics in Influencing Intentions to Use an Online Bank: Moderating Technological Anxiety
Abstract
Digital innovations have numerous impacts on modern life; as such, many business models have integrated online or virtual forms, which includes banking. An online bank is a virtual form of a bank’s business model that utilizes smartphones and the Internet. This paper intends to analyze the role of network externalities, innovation characteristics, and technological anxiety on the intention to use new forms of this financial business model. The model of this research uses three aforementioned theories on intention to use an online bank in Indonesia. This paper further verifies the relationship between network externalities to intention to use and examines whether any mediating effect of innovation and/or technological anxiety have a moderating effect on the proposed relationships. With the participation of 174 respondents, the data were gathered through purposive sampling and then analyzed using structural equation modeling with three types
of relationships: direct, indirect/mediation, and moderation. The result show that network externalities have direct effects on intention to use, most characteristics of innovation have mediating effects on previous relationships, and technological anxiety has a moderating effect in some paths.
References
Agarwal, R., & Prasad, J. (1997). The role of innovation characteristics and perceived voluntariness in the acceptance of information technologies. Decision Sciences, 28(3), 557–582.
Ahmad, J. I. & Daud, M. S. (2011, Dec 5-6). Technophobia phenomenon in higher educational institution: A case study, Humanities, Science and Engineering (CHUSER). Paper presented at the 2011 IEEE Colloquium on Humanities, Science, and Engineering Research, CHUSER 2011 (pp. 111-116), Penang, Malaysia. doi: doi:10.1109/chuser.2011.6163697
Bozbay, Z., & Yasin, B. (2008). The impact of perceived innovation characteristics on technology adoption. The International Journal of Technology, Knowledge, and Society, 4(4), 117–128.
Burn-Callander, R. (2014, February 25). The history of money: From barter to bitcoin. Retrieved from https://www.telegraph.co.uk.
Brynjolfsson, E., & Kemerer, C. F. (1996). Network externalities in micro-computer software: an econometric analysis of the spreadsheet market. Management Science, 42(12), 1627–1648.
Chen, J., Durairaj, S., Vinayak, H. V., & Lam, K. (2014). Digital banking in Asia: Are you ready for your next generation of customers? In Gold, A., Bucci, R., Ferry, N., Foyen, L., Gallagher, C., Hunter, D., & Wang, J (Eds.), Digital Banking in Asia Winning approaches in a new generation of financial services. Australia: McKinsey & Company.
Chou, C., & Shy, O. (1990). Network effects without network externalities. International Journal of Industrial Organization, 8(2), 259–270.
Compeau, D. H., & Huff, S. (1999). Social cognitive theory and individual reactions to computing technology: a longitudinal study. MIS Quarterly, 23(2), 145–158.
Cooper, D., & Schindler, P. (2014). Business research methods. (12th ed.) Singapore: McGraw-Hill.
Cornescu, V., & Adam, C. (2013). The consumer resistance behavior towards innovation. Procedia Economics and Finance, 6, 457–465.
Das, K., Gryseels, M., Sudhir, P., & Tan, K. (2016). Unlocking Indonesia’s digital opportunity. Australia: McKinsey & Company.
Dearing, J. A. (2007). Measurement of innovation attributes. Retrieved from http://crn.hostworks.net/media/3399/innovation_attributes_measurement_2_.pdf
Ewe, S., Yap, S., & Lee, C. (2015). Network externalities and the perception of innovation characteristics: Mobile banking. Marketing Intelligence & Planning, 33(4), 592–611.
Fornell, C., & Larcker, D. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
Fugger, R. (2004). Money as IOUs in social trust networks & a proposal for a decentralized currency network protocol. Retrieved from http://www.library. uniteddiversity.coop.
Gu, J., Lee, S., & Suh, Y. (2009). Determinants of behavioral intention to mobile banking. Expert Systems with Applications, 36(9), 11605–11616.
Hair, J. F., Black, W. C., Babin, B., & Anderson, R. E. (2010). Multivariate data analysis. New York: Pearson Prentice Hall.
Igbaria, M., & Iivari, J. (1995). The effects of self-efficacy on computer usage. Omega, International Journal of Management Science, 23(6), 587–605.
Indonesian Internet Service Providers Association. (2017). Penetration of infography and Internet user behavior in Indonesia. Retrieved June 6, 2018, from http://www.teknopreneur.com.
Jarvenpaa, S. L., Tractinsky, N., & Vitale, M. (2000). Consumer trust in an Internet store. Information Technology and Management, 1, 45–71.
Woo, J. (2017, August 30). DBS Launches Digibank in Indonesia. The Straits Times. Retrieved from https://www.straitstimes.com/business/companies-markets/dbs-launches-digibankin-indonesia
Katz, M., & Shapiro, C. (1986). Technology adoption in the presence of network externalities. The Journal of Political Economy, 94(4), 822–841.
Kinda, T., & Yan, T. (2018, February 22). A Digital-Savvy Indonesia. Retrieved from https://blogs.imf.org/2018/02/22/a-digital-savvy-indonesia/
Leibenstein, H. (1950). Bandwagon, snob, and Veblen effects in the theory of consumers’demand. The Quarterly Journal of Economics, 64(2), 183–207.
Liebowitz, S., & Margolis, S. E. (1994). Network externality: An uncommon tragedy. The Journal of Economic Perspectives, 8(2), 133–150.
Limthongchai, P., & Speece, M. (2003). The effect of perceived characteristics of innovation on e-commerce adoption by SMEs in Thailand. SSRN Electronic Journal.
Meuter, M., Ostrom, A., Bitner, M., & Roundtree, R. (2003). The influence of technology anxiety on consumer use and experiences with self-service technologies. Journal of Business Research, 56(11), 899–906.
Moore, G. C., & Benbasat, I. (1991). Development of an instrument to measure the perceptions of adopting an information technology innovation. Information Systems Research, 2(3), 192–221.
Panian, Z. (2001). A brief discussion on demand-side network externalities. Working paper, University of Zagreb, Croatia.
Parthasarathy, M., & Bhattacherjee, A. (1998). Understanding post-adoption behavior in the context of online services. Information Systems Research, 9(4), 362-379.
Rogers, E. (1995). Diffusion of innovations (4th ed). New York: Free Press.
Rohlfs, J. (1974). A theory of independent demand for a communications service, Bell Journal of Economics, Spring, 5, 16–37.
Sengupta, J. (2014). Theory of Innovation: A new paradigm of growth. London: Springer Cham.
Shurmer, M. (1993). An investigation into sources of network externalities in the packaged PC software market. Information Economics and Policy, 5(3), 231–251.
Song, M., Parry, M., & Kawakami, T. (2009). Incorporating network externalities into the technology acceptance model. Journal of Product Innovation Management, 26(3), 291–307
Strader, T., Ramaswami, S., & Houle, P. (2007), Perceived network externalities and communication technology acceptance. European Journal of Information Systems, 16(1), 54–65.
Van Slyke, C., Ilie, V., Lou, H., & Stafford, T. (2007). Perceived critical mass and the adoption of a communication technology. European Journal of Information Systems, 16(3), 270–283.
Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: toward a unified view, MIS Quarterly, 27(3), 425–478.
Wang, C., Lo, S., & Fang, W. (2008). Extending the technology acceptance model to mobile telecommunication innovation: The existence of network externalities. Journal of Consumer Behavior, 7(2), 101–110.
Williams-Grut, O. (2015). This is how a new crop of companies is trying to reinvent banking. [online] Business Insider. Retrieved March 10, 2018, from http://www.uk.businessinsider.com
Wijanto, S. (2008). Structural equation modeling with LISREL 8.8: Concepts and Tutorial. Yogyakarta: Graha Ilmu.
Younes, M. B., & Al-Zoubi, S. (2015). The impact of technologies on society: A review. IOSR Journal of Humanities and Social Science, 20(2), 82–86.
Copyright Transfer Statement for Journal
1) In signing this statement, the author(s) grant UNIMAS Publisher an exclusive license to publish their original research papers. The author(s) also grant UNIMAS Publisher permission to reproduce, recreate, translate, extract or summarize, and to distribute and display in any forms, formats, and media. The author(s) can reuse their papers in their future printed work without first requiring permission from UNIMAS Publisher, provided that the author(s) acknowledge and reference publication in the Journal.
2) For open access articles, the author(s) agree that their articles published under UNIMAS Publisher are distributed under the terms of the CC-BY-NC-SA (Creative Commons Attribution-Non Commercial-Share Alike 4.0 International License) which permits unrestricted use, distribution, and reproduction in any medium, for non-commercial purposes, provided the original work of the author(s) is properly cited.
3) For subscription articles, the author(s) agree that UNIMAS Publisher holds copyright, or an exclusive license to publish. Readers or users may view, download, print, and copy the content, for academic purposes, subject to the following conditions of use: (a) any reuse of materials is subject to permission from UNIMAS Publisher; (b) archived materials may only be used for academic research; (c) archived materials may not be used for commercial purposes, which include but not limited to monetary compensation by means of sale, resale, license, transfer of copyright, loan, etc.; and (d) archived materials may not be re-published in any part, either in print or online.
4) The author(s) is/are responsible to ensure his or her or their submitted work is original and does not infringe any existing copyright, trademark, patent, statutory right, or propriety right of others. Corresponding author(s) has (have) obtained permission from all co-authors prior to submission to the journal. Upon submission of the manuscript, the author(s) agree that no similar work has been or will be submitted or published elsewhere in any language. If submitted manuscript includes materials from others, the authors have obtained the permission from the copyright owners.
5) In signing this statement, the author(s) declare(s) that the researches in which they have conducted are in compliance with the current laws of the respective country and UNIMAS Journal Publication Ethics Policy. Any experimentation or research involving human or the use of animal samples must obtain approval from Human or Animal Ethics Committee in their respective institutions. The author(s) agree and understand that UNIMAS Publisher is not responsible for any compensational claims or failure caused by the author(s) in fulfilling the above-mentioned requirements. The author(s) must accept the responsibility for releasing their materials upon request by Chief Editor or UNIMAS Publisher.
6) The author(s) should have participated sufficiently in the work and ensured the appropriateness of the content of the article. The author(s) should also agree that he or she has no commercial attachments (e.g. patent or license arrangement, equity interest, consultancies, etc.) that might pose any conflict of interest with the submitted manuscript. The author(s) also agree to make any relevant materials and data available upon request by the editor or UNIMAS Publisher.
