Electronic banking in Finland:

Consumer beliefs and reactions

to a new delivery channel
Received (in revised form): 27th September, 2001

Heikki Karjaluoto
is an assistant professor at the University of Oulu. His main research interests cover electronic delivery channels in banking,
specifically Internet and mobile banking, consumer behaviour in an IT environment and Internet research in general.

Minna Mattila
is a professor at the School of Business and Economics/Marketing at the University of Jyväskylä.

Tapio Pento
is a professor at the School of Business and Economics/Marketing at the University of Jyväskylä.

Abstract The increasing turbulence in the financial service industry sector since the
mid-1990s has created a whole new delivery channel for banking: Internet banking. The
purpose of this paper is to describe the current state of Internet banking in Finland and
to study consumer perceptions, beliefs and reactions to electronic banking in general
and Internet banking in particular. The results of this study indicate that bank managers
can, by knowing the basic beliefs consumers hold about Internet banking, create more
effective customer communication, improve software and target prospects better
concerning Internet banking. There is wide agreement that Internet banking will on the
one hand have a great impact on the whole bank market, and on the other hand will be
considered the most important retail banking delivery channel in the near future. A total
of 3,000 questionnaires was prepared and sent to MeritaNordbanken customers in
Finland. Using a mailed questionnaire with a response rate of 38.9 per cent, it was found
that 40 per cent of the Finnish consumers who responded to this survey were already
using Internet banking services. The results of this study provide interesting additions to
knowledge of electronic banking and consumer behaviour.

Keywords Electronic banking, Internet, Finland, customers, consumer behaviour,

beliefs

Internet in 1998.1,2 More than half of the

Heikki Karjaluoto
University of Oulu, Faculty of
Economics and Industrial
Management Marketing,
P.O. Box 4600, FIN-90014
Oulun yliopisto, Finland.
Tel: +358 40 5361 636;
Fax: +358 8 553 2906;
E-mail:
heikki.karjaluoto@oulu.fi
DEVELOPMENT OF INTERNET
BANKING IN FINLAND
More than one-third of Finns use the
Internet every week and Finland is a world
leader in terms of electronic banking.
Almost 2.5 million Finns, that is 63 per
cent of those aged 15–74, had access to the
Internet users reported using the Internet
daily. Over 0.5 million citizens made
electronic purchases on the Internet during
the last year. More than 40 per cent of all
Finnish households had a computer in
spring 1999 and 22 per cent had an Internet
connection, ie there were 107 Internet

346 Journal of Financial Services Marketing Vol. 6, 4, 346–361 # Henry Stewart Publications 1363-0539 (2002)

connections per 1,000 inhabitants.1 Finland
seems to have an extremely good platform
for electronic banking. For instance, the
Ministry of Education aimed to make
Internet services available to all education
institutions in Finland by the end of 2001.
This highly advanced technological
infrastructure partly explains the high
Internet banking usage rate in Finland. The
largest bank in Finland,
MeritaNordbanken, launched its Internet-
based Solo-service system in 1996.
MeritaNordbanken has over 8.5 million
individual customers, almost 0.5 million
small or medium-sized companies and
about 500 big corporations. In Finland,
MeritaNordbanken is the market leader,
but the new Nordic bank also has a healthy
stake in Denmark and Sweden. Since 1996
the total number of online customers has
grown steadily and the share of online
transactions is now 28 per cent.3
The adoption of online banking services
is one of the highest in the world. In July
2000, the number of MeritaNordbanken’s
Internet customers in Finland was 700,000;
this was expected to rise to 1.2 million by
the end of 2001. Competitor banks in
Finland, for instance Leonia and
Osuuspankki, have similar online banking
services, but comparing the amount of
online customers, the second largest bank
in Finland, Osuuspankki Group, has
460,000 Internet customers.4 Leonia Bank
has 350,000 Internet customers and has the
highest percentage of Internet users
calculated from its overall customer base,
27 per cent.5 Comparing Finnish online
banking to, for example, Germany, the
difference in the amount of online users is
huge. The largest bank in Germany,
Deutsche Bank, had just 100,000 Internet
customers in Summer 2000,3,6 but Finnish
banks have over a million of these per
month. MeritaNordbanken, for example,
has over 1.4 million Internet customers in
Scandinavia, who use online services 3.2
million times a month. Most of the
# Henry Stewart Publications 1363-0539 (2002) Vol. 6, 4, 346–361
Electronic banking in Finland
individual customers use the Solo-service
for paying bills. MeritaNordbanken has
over four million bill payments every
month and expected the amount to rise to
six million by the end of the year 2000.
The reason for the success of the
MeritaNordbanken Solo-service is that the
bank has been developing the online
concept since 1982. In three years the
company expects to have a 250–300
million Euro increase in its Internet
business. The future trend will be the
movement from PC-based Internet
banking to wireless, mobile phone Internet
banking. MeritaNordbanken has for some
time cooperated with mobile phone
manufacturers and teleoperators. Its
cooperation project with Nokia and Visa,
called EMPS (Electronic Mobile Payment
Services), is expected to change Internet
banking totally. The EMPS will make
unnecessary all bank and credit cards and
personal online banking user IDs as well as
passwords; customers will be able to
manage all their payments with EMPS.
This technology even allows customers to
draw out money from ATMs with a
mobile phone. It is expected that in the
future everything will be controlled via
mobile phone.6–8
MeritaNordbanken’s Internet Solo-
service can be reached via a computer
with an Internet connection, a telephone,
an Internet television, a GSM-SMS, or
Wireless Application Protocol (WAP)-
enabled mobile phones. Customers have
their own user ID and a key code list to
access the service. Each banking session has
a unique encryption key and it is said that
the security and privacy of the system are
superior to other systems.
This paper next describes electronic
banking and reviews electronic banking
literature in order to gain understanding of
consumer perceptions and beliefs about
electronic delivery in banking. A large
postal survey was carried out during the
summer of 2000 in order to obtain a basic
Journal of Financial Services Marketing 347
Karjaluoto, Mattila and Pento
understanding of consumer behaviour in
Internet banking and the results of this are
given. A discussion of the findings follows
in the final section of the paper.
ELECTRONIC BANKING
The motivation for this study came from
the rapid development of electronic
banking delivery channels in Finland. It
has been argued that the information
revolution will fundamentally change the
way banks and other financial institutions
operate. Most of the players in financial
markets have recognised the fact that
electronic banking is a major game and
everybody wants to be in it. The main
delivery channel for electronic banking
today is the Internet, and the growth of
electronic banking as a delivery channel
depends heavily on its development. A
Finnish Internet specialist estimates that by
the year 2003 there will be over a billion
Internet connections; over half of these via
a mobile phone.2 In the near future it will
be possible to manage all bank transactions
via a mobile phone; the meaning of time
and place is disappearing in banking. The
mobile phone penetration is around 25 per
cent across Europe as a whole and is likely
to exceed 100 per cent in some countries
by the year 2002. It has been estimated,
therefore, that computers are not
necessarily the best platform for the
delivery of all financial services.2,9
To date the Internet is mostly accessed
via personal computer, but as stated,
Internet technologies are developing at a
huge pace. From this point, mobility (ie
Internet access always and everywhere) is a
key driving force of Internet technology.
The combination of the Internet and the
World Wide Web can be considered as
one of the most significant advances in
information technology. Electronic
banking is the newest delivery channel in
many developed countries and there is a
wide agreement that the new channel will
348 Journal of Financial Services Marketing Vol. 6, 4, 346–361
have a significant impact on bank
markets.10–12 According to Nehmzow13
Internet banking offers traditional players
in the banking sector the opportunity to
add a low-cost distribution channel for
their numerous different services. In
addition, he continues that Internet
banking also creates a threat to banks’
market share, because it neutralises so
many of the competitive advantages of
having a traditional bank branch network.
Electronic banking can be described in
many ways. In a very simple form, it means
provision of information or services by a
bank to its customers, via a computer,
television or mobile phone.10 Burr,14 for
example, describes it as an electronic
connection between bank and customer in
order to prepare, manage and control
financial transactions. Internet banking
involves consumers accessing their banks
and accounts to undertake banking
transactions. At an advanced level, Internet
banking is called transactional online
banking, because it involves provision of
facilities such as accessing accounts, funds
transfer and buying financial products or
services online.15 Electronic banking should
be viewed as a high-order construct
consisting of several distribution channels
and it should be noted that it is in fact a
larger platform than just banking via the
Internet. The following platforms can be
distinguished: (a) Internet banking, (b)
telephone banking, (c) TV-based banking,
(d) mobile phone banking, and (e) PC
banking. The two most common types used
in Finland are Internet banking and
telephone banking, but banks, other
financial institutions and telecommunication
companies predict an explosion of mobile
phone banking during the next few years.
Consumer beliefs about Internet
banking
The adoption of electronic banking has
been a burning issue for financial
# Henry Stewart Publications 1363-0539 (2002)

institutions recently and the object of
various academic studies.10,11,15–17
According to Athanassopuolos et al.,16
while price, speed and the bank’s
reputation seemed to be important criteria
for the adoption of electronic banking,
some weight was also placed on
knowledge of banking personnel and their
willingness to serve customers. Customers
tend to value convenience, increased choice
of access to the bank, and improved
control over the banking activities and
finances in electronic banking.10 She says
that banks have recognised that electronic
banking could reduce banking costs and
offer further competitive advantage.
Furthermore, consumers regarded
accessibility, functionality and service at
low price as important in Internet banking.
Jayawardhena and Foley11 maintain that
time, privacy, control and economy are
among important aspects with which
customers are concerned. Consumers are
becoming busier and hence are seeking to
carry out transactions at a time of their
convenience. Negative attitude towards the
security of Internet banking remains the
most important issue for banks. Security
concerns arise from the use of an open
network: customers are afraid that their
financial information might become an
open book to other people via the
Internet.10,17–19 Karjaluoto and Mattila,20
however, argue that security concerns are
not among the greatest obstacles. Lack of
awareness of the service and benefits, usage
problems, security concerns, high costs,
resistance to change and lack of computer
access were found to be the main barriers
for the adoption of electronic banking by
Australian consumers.15 The development
of electronic banking will fundamentally
depend on how many people acquire and
retain Internet access.21 The most
important reason for adopting Internet-
based services is actually each individual’s
attitude towards technology itself.22 In
general, it is more likely that people who
# Henry Stewart Publications 1363-0539 (2002) Vol. 6, 4, 346–361
Electronic banking in Finland
are familiar with computers and the
Internet will adopt Internet banking
services before people who are not familiar
with computers.23
The present study aims to describe the
adoption of electronic banking by
consumers in Finland. By studying the
beliefs of different types of consumers,
new valuable information concerning
electronic banking can be obtained. In
addition, studying the relationship between
perceptions of technology, demographic
variables and Internet banking behaviour,
provides a clarification of factors affecting,
for instance, the intention to recommend
Internet banking to other people.
METHODOLOGY
The data were collected by means of a
questionnaire that was mailed to 3,000
individual consumers in Finland. The data
were first divided into three different
groups labelled old users, new users and
non-users on the basis of their electronic
banking experience. A thousand
questionnaires were mailed to each group.
Old users had used Solo-services already in
the year 1997 and have used it since. The
second group — new users — began using
Solo-service after 1997. The last group —
non-users — was not using Solo-service in
1997 and does not use it now. Almost all
respondents were customers of
MeritaNordbanken. Questionnaires were
first posted at the beginning of June 2000,
and then remailed in July 2000. The
quantitative sample was targeted to match
the demographics of MeritaNordbanken
customers in Finland along dimensions
such as gender, age, education level,
income and profession. Scales to measure
each of the beliefs were developed based
on previous literature and existing
scales.24,25 Measures of beliefs were based
on the suggestions of Fishbein and Ajzen.26
Three types of questionnaires were
prepared and sent. However, most of the
Journal of Financial Services Marketing 349
Karjaluoto, Mattila and Pento
questions addressed were the same, but
questions varied little in terms of
experience about using the banking
service, expectations about the service, etc.
All questionnaires consisted of questions
about consumers’ demographic
characteristics, environmental questions
about their banking in general (eg the
distance from home to bank branch), bill
payment questions, and bill payment mode
(mobile phone, PC, ATM) etc.
Respondents were also asked detailed
questions about the use of the Internet in
banking, the factors affecting the choice of
banking mode, and their attitudes towards
technology, the Internet and Internet
banking. Every question on the
questionnaire focused directly or indirectly
on a specific issue and it was ensured that
questions were brief and clear. However,
some of the questions were found hard to
answer by study participants. While
designing the survey instrument, it was
ensured that instrumentation bias was
avoided. Multiple choice questions were
used. Details of the questionnaire are given
in the next section.
Questions concerning consumer beliefs
were implemented on a seven-point Likert
scale. Respondents were asked to complete
the seven-point scale on each question or
proposition indicating its importance in
defining their beliefs, attitudes and
intentions towards electronic banking (eg
–3=not at all important, to 3=very
important). Results will be presented in
simple terms, which look at the effects of
the individual difference factors on beliefs.
At the end statistical tests were conducted
to determine if there is a significant
relationship between intention to
recommend Internet banking to others and
demographics.
RESULTS
After a follow-up, overall responses
received were 1,193, but 26 of these were
350 Journal of Financial Services Marketing Vol. 6, 4, 346–361
discarded as they were either blank, filled
out wrongly, or answered only one or
two questions. The authors were satisfied
with the response rate, which was finally
38.9 per cent. This was far beyond their
expectations and also a little above the
acceptable response rate by economic
science standards, which suggest a rate
between 20 and 30 to be normal and
acceptable. The remaining 1,167
questionnaires were used for data analysis.
Demographics of the participants are
shown in Table 1.
As explained earlier in this study,
questionnaires were sent to three different
target groups that differed in terms of
Internet banking knowledge and usage
rate. The first group was called non-users;
they were not using electronic banking
services. Responses were received from
349 participants (response rate 34.9 per
cent). The second group consisted of new
users who had had the user ID and
password for less than three years; a
major proportion of the respondents of
this group was currently not using
electronic banking services. A total of 344
responses were received from this group
(response rate 34.4 per cent). The third
group consisted of long-standing users,
and as expected, this group was the most
eager to participate in the study.
Responses were received from a total of
474 participants (response rate 47.4 per
cent).
Non-user beliefs about electronic
banking
Only a small proportion of non-users had
tested Internet banking services (3.7 per
cent). The results suggest three important
factors influencing the first experiment:
— possibility of paying bills at home
— attempt to save money
— attempt to save time and effort in bill
payment.
# Henry Stewart Publications 1363-0539 (2002)
 Electronic banking in Finland

Table 1 Profile of respondents

Demographic Frequency Percentage Valid Cumulative

characteristics percentage percentage

Gender
Male 601 51.4 51.5 51.5
Female 565 48.3 48.5 100.0
Missing 1 0.1
Total 1167 100.0

Age
Under 34 years 128 11.0 11.0 11.0
35-49 years 459 39.3 39.4 50.3
50-64 years 369 31.6 31.6 82.0
65 years and over 210 18.0 18.0 100.0
Missing 1 0.1
Total 1167 100.0

Household income
Less than FIM100,000 206 17.6 18.3 18.3
100,001–150,000 201 17.2 17.8 36.1
150,001–225,000 231 19.7 20.5 56.5
More than 225,000 491 42.0 43.5 100.0
Missing 38 3.5
Total 1167 100.0

Marital status
Married 680 58.1 58.6 58.6
Cohabitation 138 11.8 11.9 70.5
Single 136 11.6 11.7 82.2
Widow 70 6.0 6.0 88.2
Divorced 137 11.7 11.8 100.0
Missing 6 0.8
Total 1167 100.0

Profession
Leading position 565 48.4 48.6 48.6
Worker 237 20.3 20.4 69.0
Not at work 361 30.9 31.0 100.0
Missing 4 0.3
Total 1167 100.0

It seems that non-users are also seeking cost
savings via the Internet, therefore Internet
banking is not considered expensive by
Finnish consumers. This finding is
interesting and was also asked in questions
concerning beliefs about Internet banking.
Questions about beliefs were implemented
on seven-point Likert scales ranging from
strongly agree (3) to strongly disagree
(–3). The results are presented in Figure 1.
As can be seen, the most remarkable
belief about electronic banking is that it
offers no personal service (mean 0.71). A
total of 40.9 per cent of the respondents
rated this belief into the category strongly
agree. However, the other end of the
seven-point scale also had some responses.
It seems that a large number of non-users
value and long for personal service in their
banking.
Internet banking was not considered
time consuming among non-users (mean
–0.46). A total of 30.0 per cent rated this
to category strongly disagree. Internet
banking was neither regarded as expensive
nor incomprehensible. While 29.9 per cent
of the non-users rated expensive in the
category strongly disagree, only 20.7 per
cent rated it in the category strongly agree.
The mean score for expensive was –0.38.
Similarly, the mean score for
incomprehensible was –0.45. These

# Henry Stewart Publications 1363-0539 (2002) Vol. 6, 4, 346–361 Journal of Financial Services Marketing 351
Karjaluoto, Mattila and Pento

Expensive Time consuming

100 % 100 %

75 % 75 %

50 % 50 %

25 % 25 %

0% 0%
–3 –2 –1 0 1 2 3 –3 –2 –1 0 1 2 3

No personal service Insecure

100 % 100 %

75 % 75 %

50 % 50 %

25 % 25 %

0% 0%
–3 –2 –1 0 1 2 3 –3 –2 –1 0 1 2 3
Incomprehensible Only for nerds
100% 100 %

75% 75 %

50% 50 %

25% 25 %

0% 0%
–3 –2 –1 0 1 2 3 –3 –2 –1 0 1 2 3

Difficult to use
100 %
–3 = Strongly disagree
75 % 3 = Strongly agree

50 %

25 %

0%
–3 –2 –1 0 1 2 3

Figure 1 Non-user beliefs about Internet banking

findings suggest that non-users deem
Internet banking to be inexpensive and
service on the website comprehensible.
The next graph considering security of
Internet banking reveals interesting
findings. As can be seen, security concerns
were not deemed as important as expected,
and the literature suggested.15 Non-users
believed that Internet banking is quite
secure to use. The mean score for belief
that Internet banking is insecure and
untrustworthy was 0.31. While 26.4 per

352 Journal of Financial Services Marketing Vol. 6, 4, 346–361 # Henry Stewart Publications 1363-0539 (2002)

cent strongly agreed, a total of 18.2 per
cent strongly disagreed. Standard deviation
was relatively low (2.23). It seems that
while some consumers are afraid of using
Internet banking due to security concerns,
others trust the security of the service.
Thereby, more in-depth investigation of
this crucial issue is needed.
Internet banking was not regarded as
only for computer nerds. A total of 42.9
per cent strongly disagreed with this
proposition. The mean score was –1.29
and standard deviation low (2.01). Finally,
non-users were asked whether they had
usage problems with computers and the
Internet. Difficulties in using computers
and the Internet seemed to be important
barriers for Internet banking as the
literature suggests. It should be borne in
mind that most of the non-users do not
have access to the Internet. Therefore, the
Internet is considered hard to use and
access. A total of 37.1 per cent reported
major difficulties in using computers
(category strongly agree), which has a heavy
impact on the adoption of Internet
banking. However, almost 22 per cent
ranked usage problems in the category
strongly disagree. The mean score for
difficulties in usage was 0.39, which can be
considered relatively high. Standard
deviation was 2.45. The following sections
show new and old user beliefs about
Internet banking.
New user beliefs about electronic
banking
As mentioned earlier in this study, new
users consisted of consumers with required
user ID and password for Internet
banking. However, it was also pointed out
that most of the consumers in this segment
were not using Internet banking services
regularly. This fact is worth remembering
while discussing new users.
Figure 2 shows that new users value free
from time and place most with the mean
# Henry Stewart Publications 1363-0539 (2002) Vol. 6, 4, 346–361
Electronic banking in Finland
score of 2.23. A total of 54.9 per cent
rated free from time and place as very
important. This score can be considered
very high. Also the standard deviation was
low (1.57). It seems that the possibility of
paying bills at home or at work is
extremely important for new users. The
second important belief new users hold
about Internet banking is that of time
saving (mean 1.65). While consumers are
becoming busier, it is important to have
fast and time-saving banking services. A
total amount of 48.6 per cent rated saves
time in the category strongly agree.
Similarly, Internet banking was rated
faster than other modes of payment (mean
1.29; s.d. 2.17). Almost 50 per cent
strongly agreed. Furthermore, Internet
banking was not considered frivolous by
new users (mean –2.24; s.d. 1.45). 70.2 per
cent put it in the category strongly disagree.
This finding shows that banking in
general, and Internet banking in particular,
is not considered frivolous.
The belief that Internet banking offers
the opportunity not to meet bank
personnel and other customers was in the
category strongly disagree (61.7 per cent).
Thus, Internet banking is not used because
it allows the customer to isolate him or
herself from other people. In addition,
Internet banking was not regarded as
expensive (mean score –1.25). Specifically,
40.6 per cent rated this in the category
strongly disagree.
To summarise, these results indicate that
above all new users value speed and
freedom in Internet banking. Banking via
the Internet was considered neither
expensive nor frivolous.
Old user beliefs about electronic
banking
Old users were asked why they had
remained Internet banking users. Figure 3
shows that consumers appreciate being free
from time and place constraints with a mean
Journal of Financial Services Marketing 353
Karjaluoto, Mattila and Pento

Fast Expensive
100 % 100 %

75 % 75 %

50 % 50 %

25 % 25 %

0% 0%
–3 –2 –1 0 1 2 3 –3 –2 –1 0 1 2 3

Frivolous Free from time and place

100 % 100 %

75 % 75 %

50 % 50 %

25 % 25 %

0% 0%
–3 –2 –1 0 1 2 3 –3 –2 –1 0 1 2 3

No need to face personnel Service same standard

100 % 100 %

75 % 75 %

50 % 50 %

25 % 25 %

0% 0%
–3 –2 –1 0 1 2 3 –3 –2 –1 0 1 2 3

Saves time
100 %

75 %

50 % –3 = Strongly disagree
3 = Strongly agree
25 %

0%
–3 –2 –1 0 1 2 3

Figure 2 New user beliefs about Internet banking

score of 2.45. The standard deviation for
this factor was low at 1.16. Furthermore,
bill payment was considered to be faster
via the Internet than via other modes of
payment (eg at a branch or via ATMs).
The mean score for this was 2.36. A total
of 70.0 per cent of the respondents rated
speed as very important. Standard
deviation was very low at 0.98. In this
question consumers were very united, for
example only 1.8 per cent strongly
disagreed. Moreover, bill payment via the

354 Journal of Financial Services Marketing Vol. 6, 4, 346–361 # Henry Stewart Publications 1363-0539 (2002)
 Electronic banking in Finland

Fast Cheap
100 % 100 %

75 % 75 %

50 % 50 %

25 % 25 %

0% 0%
-3 -2 -1 0 1 2 3 -3 -2 -1 0 1 2 3

Frivolous Free from time and place

100 % 100 %

75 % 75 %

50 % 50 %

25 % 25 %

0% 0%
-3 -2 -1 0 1 2 3 -3 -2 -1 0 1 2 3

Elegant and appreciated Service same standard

100 % 100 %

75 % 75 %

50 % 50 %

25 % 25 %

0% 0%
-3 -2 -1 0 1 2 3 -3 -2 -1 0 1 2 3

No need to face personnel

100 %

75 %

50 %
–3 = Strongly disagree
25 % 3 = Strongly agree

0%
-3 -2 -1 0 1 2 3

Figure 3 Old user beliefs about Internet banking

Internet was considered cheaper than other Internet banking is always of the same
modes of payments. A total of 46.1 per standard also had some importance (mean
cent rated it very important. score 0.80). No need to face bank’s
The belief that customer service in personnel or other customers (mean –2.10),

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Karjaluoto, Mattila and Pento

appreciation and elegance of Internet bank
(mean –2.00), and playfulness (mean –2.09)
were all considered unimportant. These
findings are largely in line with the
previous findings among new users.
Playfulness was considered even lower
among new users than old ones (mean
–2.24). To sum up, current users do not
see their banking as elegant, appreciated,
or playful. Consumers are using Internet
banking mostly due to time and money
savings.
As suggested in the literature, the
strength of consumers’ product beliefs is
affected by past experiences with the target
object.27 Beliefs about product attributes
or consequences tend to be stronger when
based on actual use of the product.
Thereby these findings about beliefs are in
line with the past literature. It seems that
past experience has a relatively high effect
on beliefs that different customer groups
hold about Internet banking.
Consumer beliefs about technology in
general and Internet banking
This survey also asked about consumers’
perception of different technologies.
Results are shown in Table 2. There are a
number of notable outcomes in the
frequency data. As can be seen, there are
significant differences between non-users,
new users and old users. As expected, users
had more positive beliefs about technology
than non-users did. Roughly speaking, the
more familiar a consumer is with
technology the more positive beliefs he or
she seems to hold about an object. As
revealed by the table, old users seem to
have more positive beliefs about
technology than new users and non-users.
To begin with mobile phones: old users
seem to have the most positive perception
(mean score 1.16), followed by new users
(mean score 0.77), and non-users (mean
score –0.19).
Consumers’ opinion of computer was
parallel: non-users’ mean score was –0.46,
new users’ 1.08 and old users’ 2.07.
Further, old users liked bank and credit
cards (mean score 1.79), whereas non-users
did not find them so positive (mean 0.30).
ATMs were mostly disliked by non-users
(mean –0.37). Non-users (mean 0.90)
disliked e-mail and the Internet, whereas
users found them positive. Personal service
was found to be most important for non-
users (mean score 2.44). However, users
also placed weight on personal service.
The final three questions asked consumers
to rate teletext, automates in general and
electric ID cards. Surprisingly, non-users
liked teletext the most. Automates in
general and electronic ID cards were
mostly liked by old users.

Table 2 Technology perceptions

Consumer beliefs about Non-users New users Old users Total

different objects (–3 to 3 ) Mean Mean Mean Mean N

Mobile phone –0.19 0.77 1.16 0.70 1043

Computer –0.46 1.08 2.07 1.17 1017
Bank and credit cards 0.30 1.14 1.79 1.21 1065
ATM* –0.37 0.59 0.13 0.14 1020
E-mail –0.73 0.90 2.22 1.14 986
Internet –1.13 0.89 2.16 1.02 981
Personal service 2.44 1.95 1.55 1.91 1086
Text television 1.15 1.12 0.90 1.03 1028
Automates in general –0.31 0.38 0.59 0.30 1031
Electronic ID card –0.60 –0.03 0.97 0.31 902

Notes: *ATM = Automatic teller machine

No = Number of responses
Dislike –3 –2 –1 0 1 2 3 Like

356 Journal of Financial Services Marketing Vol. 6, 4, 346–361 # Henry Stewart Publications 1363-0539 (2002)
 Electronic banking in Finland

To conclude, belief evaluation and three characteristics of non-users, new

rating seem to be important factors users and old users. The analysis is shown
affecting Internet banking. As revealed by in Table 3. In general, chi-square is a
Table 2, computer and Internet beliefs statistical test commonly used to compare
have an impact on Internet banking usage. observed data with data expected to be
To be more precise, a sum variable of two obtained according to a specific hypothesis.
variables from Table 2 was constructed. Statistically significant p-values were found
These were computer perception and among non-users between age and
Internet perception. Figure 4 depicts intention to recommend (p=0.002), and
perceptions of non-users, new users and between profession and intention to
old users about this new variable
(technology perception). Table 3 Chi-square test: Intention to recommend
As Figure 4 clearly reveals, consumers’ Internet banking and demographics
perception of computers and the Internet
Pearson df Sig
varies heavily between non-users, new users chi-square (2-sided)
and old users. Surprisingly, 24.1 per cent of value p value
the non-users belong to the category like, Non-users
24.8 to the category neutral. Thus, it may Marital status 1.970 3 0.579
be argued that not all non-users have Age 26.772 9 0.002
Education 7.153 6 0.307
negative perceptions of computers and the Income 7.632 6 0.266
Internet as might have been assumed. As Profession 17.635 6 0.007
expected, new users and especially old users New users
have more positive perceptions of Marital status 5.750 3 0.124
Age 10.894 9 0.283
computers and the Internet in general. Education 14.436 6 0.025
Income 17.360 6 0.008
Profession 12.636 6 0.049
Statistical tests, analysis and findings
Old users
Finally, chi-square tests were conducted to Marital status 1.014 3 0.798
Age 11.669 9 0.233
determine the relationship between the Education 0.255 6 1.000
respondents who were willing to Income 3.525 6 0.741
Profession 12.362 6 0.054
recommend Internet banking to others and

90
80
70
60
50
%
40 Old users
30
20
New users
10
0
Dislike Neutral Like Non-users

Figure 4 Computer technology perception

# Henry Stewart Publications 1363-0539 (2002) Vol. 6, 4, 346–361 Journal of Financial Services Marketing 357
Karjaluoto, Mattila and Pento
recommend (p=0.007). It seems that the
younger and the better occupation the
non-user has, the more likely he or she is
to recommend. Another significant p-value
was found among new users between
income and intention to recommend. In
this category, new users with higher
incomes are more likely to recommend
Internet banking. No statistically
significant p-values (p50.05) were found
among old users.
In addition, correlations between
intention to recommend Internet banking
and demographic characteristics were
calculated using Spearman’s rho. As the
reader might notice, different p-values
courtesy of different statistical
measurements are presented below.
Among non-users, intention to
recommend Internet banking is positively
correlated with education (r=0.141,
p50.05), and profession (r=0.187,
p50.01), and negatively with age (r=
–0.234, p50.01). Among new users,
intention to recommend is positively
correlated with household income
(r=0.223, p50.01), education (r=0.111,
p50.05), and profession (r=0.168,
p50.01), and negatively correlated with
age (r=–0.134, p50.05) and marital status
(r=–0.133, p50.05). Among old users,
intention to recommend Internet banking
is negatively correlated with age (r=–
0.112, p50.05). No other high correlation
was found among old users.
Interpretation of these results is as
follows. First of all, non-users’ intention to
recommend seems to depend on their
educational and occupational level. In
other words, the more educated and the
better occupation they have, the more
likely they are to recommend. Secondly,
new users’ intention to recommend
depends on their income level, education
and occupation. Negative correlation (age
and marital status) is explained by the fact
that while age variable increases (ie a
person is older) intention to recommend
358 Journal of Financial Services Marketing Vol. 6, 4, 346–361
decreases. These findings were quite
predictable, because many studies have
reported correlation between positive
attitudes towards Internet banking and
education, income and profession.11
Finally, another chi-square test was
conducted to determine whether there was
a correlation between intention to
recommend Internet banking and
computer technology perception. As
stated, computer technology perception
refers on the one hand to consumers’
perceptions of computers and on the other
hand to their perceptions of the Internet. It
is assumed that using this sum variable
more reliable results might be obtained
than just measuring perceptions on one
single scale. The results (see Table 4)
illustrate a strong relationship between
computer technology perception and
intention to recommend. To begin with
non-users: high correlation was found
between computer technology perception
and intention to recommend (r=0.502
p50.01). This same trend seemed to
continue in the two other groups. High
correlation was also found among new
users (r=0.564, p50.01) and old users
(r=0.349, p50.01) between computer
technology perception and intention to
recommend.
To sum up, computer technology
perception seems to have a great impact
on intention to recommend Internet
banking to others. Therefore, the more
positive technology perceptions a
consumer has the more likely he or she is
to recommend Internet banking.
Interestingly, the highest correlation was
Table 4 Chi-square test: Intention to recommend
Internet banking and technology perception
Pearson df Sig
Technology chi-square (2-sided)
perception value p value
Non-users 45.285 6 0.000
New users 95.809 6 0.000
Old users 60.746 6 0.000
# Henry Stewart Publications 1363-0539 (2002)
 Electronic banking in Finland

% Non-users % New users

100 100
90 90
80 80
70 70
60 60
50 50
40 40
30 30
20 20
10 10
0 0
Dislike Neutral Like Dislike Neutral Like

% Old users
100
90
80
70
60 Not likely
50 Not very likely
40 Quite likely
30 Very likely
20
10
0
Dislike Neutral Like

Figure 5 Technology perception: Intention to recommend Internet banking cross-tabulation

found among new users (r=0.56, p50.01),
and the lowest among old users (r=0.35,
p50.01).
In addition, these results are presented in
simple terms in Figure 5. X-axis displays
consumers’ technology perception (dislike,
neutral, like). Bar colours depict the degree
of recommendation ranging from not likely
to very likely. As Figure 5 clearly reveals,
dislike of computer technology is strongly
related to not likely to recommend and
vice versa. For instance, over 60 per cent
of old users and almost 40 per cent of new
users belonging to the computer
technology category like reported very
likely recommendation. Additionally,
consumers belonging to the neutral
category were not eager to recommend
Internet banking to others. Non-users and
new users were not likely to recommend it
to other people.
DISCUSSION
The point of departure of the research
presented has been the description of
electronic banking in Finland and the
beliefs different consumer types, such as
non-users, new users and old users, hold
about electronic banking, especially
Internet banking. This paper provided new
basic understanding of the adoption and
use of the Internet as a new electronic
delivery channel for the banking industry.
As mentioned at the beginning of this
study, electronic delivery is forecast to
become a major distribution channel for
retail banking over the next three to five

# Henry Stewart Publications 1363-0539 (2002) Vol. 6, 4, 346–361 Journal of Financial Services Marketing 359
Karjaluoto, Mattila and Pento
years. In Finland, however, its role is
already significant.
The present survey was conducted in
Finland during the summer of 2000. It
showed that non-user beliefs about and
perceptions of technology and electronic
banking differed in some respects from
those of users. Non-users’ most important
belief about Internet banking was that it
provides no personal service but is quite
secure. According to the literature, security
has been a burning issue for the non-
adoption of Internet banking. The study
showed that security concerns are not
among the greatest obstacles to adoption.
New user beliefs about Internet banking
were that it lowers banking expenses, saves
time and is free from constraints of time
and place. Old users found Internet
banking faster than other modes of
payment, cheaper, free from constraints of
time and place, and they also appreciated
the consistent standard of service.
Furthermore, the survey results suggest
that current users hold more positive
beliefs about technology in general. This
seems to have an impact on attitudes and
behaviour towards Internet banking.
Specifically, the results indicate that prior
experience has an impact on beliefs about
different technologies.
It should be noted that this study
examined Internet banking only from a
consumer perspective and was limited to
Finland. This paper provides only small
insights into electronic banking and the
study was limited to consideration of only
some questions from the whole
questionnaire. In addition, the findings of
this study are restricted to comparison of
different consumer segments. Future
research will be needed, and one such area
could concern the relationship between
belief, attitude, intention and behaviour.
Another area of research could be
comparisons across countries. The fact that
Finland is said to be one of the leading
countries in the field of Internet banking,
360 Journal of Financial Services Marketing Vol. 6, 4, 346–361
and MeritaNordbanken the number one in
the world in this area might have had an
effect on the current research findings. In
summary, the Finnish consumer holds
relatively positive beliefs about electronic
banking, in contrast, for example, to the
UK.10
ACKNOWLEDGMENT
The authors would like to thank all the
individuals who participated in the survey.
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