Effects of self‐service technology on customer value and customer readiness: The case of Internet banking

Abstract

Purpose

The purpose of this paper is to investigate whether self‐service technology (SST) can enhance customer value (CV) and customer readiness (CR). In addition, it is proposed to inspect the effects of CV and CR in customers' continued use of Internet banking.

Design/methodology/approach

An online survey was used with a sample of 771 respondents. Structural equation models (SEM) were used to examine 11 hypotheses in the theoretical framework.

Findings

SST characteristics (i.e. ease of use, usefulness, costs saved, and self‐control) demonstrated positive effects on CV and CR. CR is positively related to CV. Furthermore, customers are willing to use Internet banking when CV and CR are high.

Research limitations/implications

The study examines the factors contributing to positive effects on customers' continued use of Internet banking. Further research is recommended to investigate the effects of negative factors, such as risk and complexity. In addition, the same methods should be used to reproduce the survey in other industries to support generalizability.

Practical implications

Managers should reinforce SST in order to increase CV and CR, which would influence customers' willingness to continue using Internet banking.

Originality/value

Unlike previous research, the study focuses on consumers' continued use of Internet banking as opposed to initial use. It concentrates on customer retention rather than customer acquisition. It is the first study to conclude that CV and CR significantly affect continued use of SST.

Citation

Ho, S. and Ko, Y. (2008), "Effects of self‐service technology on customer value and customer readiness: The case of Internet banking", Internet Research, Vol. 18 No. 4, pp. 427-446. https://doi.org/10.1108/10662240810897826