Title: Factors influencing the adoption of internet banking in Oman: a descriptive case study analysis

Authors: Abdulwahed Mo. Sh. Khalfan, Yaqoub S.Y. AlRefaei, Majed Al-Hajery

Addresses: Department of Computing and Information Systems, College of Business Studies, Public Authority for Applied Education & Training, Kuwait. ' Management Department, College of Business Studies, P.O. Box 65202, Masouriya 35653, Kuwait ' Department of Computing and Information Systems, College of Business Studies, Kuwait

Abstract: Interest in electronic commerce and electronic markets has largely been focused on North America and Europe and yet there are many interesting developments taking place in the Arab Gulf region, which have received very little attention. This study aims to address these issues. This research has been focused on identifying and highlighting the main potential factors or impediments that are currently inhibiting the incorporation or adoption of electronic commerce (EC) applications expansion in the Omani Banking sector. Data, obtained for the first time, were collected using semi-structured interviews and survey questionnaire as well as reviewing some bank documents. The study explores the slow uptake of EC applications in the banking industry. The objective of this study, therefore, is to examine a number of factors, both internal (i.e. organisational) and external (i.e. industrial), that are responsible for the slow utilisation of EC applications. The results provide a pragmatic picture about the adoption of EC applications in the core financial sector domain of Oman. One of the main findings is that security and data confidentiality issues have been a major barrier. The banking sector was reluctant to use e-commerce applications as they felt that transactions conducted electronically were open to hackers and viruses, which are beyond their control. Lack of top management support was found to be an inhibiting factor in the adoption of electronic commerce applications. In general, banks in the Arab Gulf region have been |quite slow| to launch e-banking services. While they are convinced that online services reduce overheads significantly, a mixture of customer insecurities, technology investment costs and a lack of market-readiness have all conspired to make e-banking |unattractive|. These inhibiting factors need to be identified and then addressed, so that the banking sector in Oman can exploit the potential advantages of EC to remain competitive.

Keywords: e-commerce; electronic commerce; internet banking; Oman; industrial factors; organisational factors; financial services; security; data confidentiality; e-banking; online banking.

DOI: 10.1504/IJFSM.2006.009623

International Journal of Financial Services Management, 2006 Vol.1 No.2/3, pp.155 - 172

Available online: 03 May 2006 *

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