Journal of Services Marketing

Emerald Article: Internet banking adoption among mature customers: early majority or laggards? Minna Mattila, Heikki Karjaluoto, Tapio Pento

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To cite this document: Minna Mattila, Heikki Karjaluoto, Tapio Pento, (2003),"Internet banking adoption among mature customers: early majority or laggards?", Journal of Services Marketing, Vol. 17 Iss: 5 pp. 514 - 528 Permanent link to this document: http://dx.doi.org/10.1108/08876040310486294 Downloaded on: 04-04-2012 References: This document contains references to 48 other documents Citations: This document has been cited by 12 other documents To copy this document: permissions@emeraldinsight.com This document has been downloaded 5491 times.

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An executive summary for managers and executive readers can be found at the end of this article

Internet banking adoption among mature customers: early majority or laggards?

Minna Mattila
Professor of Marketing, University of Jyvaskyla, School of Business and Economics Marketing, Jyvaskyla, Finland

Heikki Karjaluoto Tapio Pento

Senior Teaching Assistant, University of Oulu, Finland Professor of Marketing, University of Jyvaskyla, School of Business and Economics Marketing, Jyvaskyla, Finland Keywords Services marketing, Internet, Banking, Consumer behaviour, Finland Abstract Finland is a world leader in electronic banking, and over 39.8 percent of all retail banking transactions were made over the Internet in August 2000. Using the data of a large survey, we analyzed mature customers' Internet banking behavior. Internet banking was the third popular mode of payment among mature customers. Household income and education were found to have a significant effect on the adoption of the Internet as a banking channel, so that over 30 percent of wealthy and well-educated mature males make e-banking their primary mode of making payments. Perceived difficulty in using computers combined with the lack of personal service in e-banking were found to be the main barriers of Internet banking adoption among mature customers. Internet banking was also found to be more unsecured among mature customers than bank customers in general.

Introduction Biophysical aging includes ``changes in sensory and intellectual functioning if the organism, diminished mobility and physical strength, changes in outer appearance, aging and death of cells'' (Moschis, 1992, p. 115). Biophysical aging can be taken into account by many marketing strategies. Lumpkin et al. (1985) argue that mature customers appreciate helpful sales staff that understand and are sensitive to the mature customers' needs. They continue that readability of labels and tags is often a determinant attribute when mature customers choose a store. Psychosocial aging Psychosocial aging implies that ``individuals undergo a gradual transformation mentally as well as in the eyes of others and their own'' (Moschis, 1992, p. 116). Psychological changes embrace mainly cognitive changes in beliefs, attitudes, personality, and needs (Kennett et al., 1995). It has been argued that the mature customer does not see herself as old as she actually is in years. Marketing strategies should take psychological aging into account sensitively. For example, Moschis (1991) argues that financial services providers should consider using older spokespeople in advertising. The perceived similarity with the spokesperson on factors such as attitudes, personality and lifestyle is more important than the age. The definition of a mature customer which is used in this study is based on studies by Sherman and Brittan (1977), Mason and Beardon (1978), and Oumli and Williams (2000). The mature consumer market, i.e. individuals
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over 65 years of age, has been recognized as a major target segment in various businesses. In Finland, for example, every fourth person will be over 65 years of age within the next 20 years. The trend of population aging is similar in all developed countries. For instance, Henderson (1998) predicts that by the year 2030 the number of Americans over 65 years of age will triple so that one-fifth of the total population will belong in this mature consumer segment. Mature customer needs This development is rapidly transforming societies toward a marketplace of increasingly mature customers. It is thus of interest to define and understand the needs of mature customers. Traditional interactive services marketing models must be taken under reconstruction as the demographic profile of population is changing rapidly. The mature bank customers have plenty of purchasing power today, and in the future they are expected to spend large sums on the financial services. Some studies suggest that in just a few years' time mature customers will control a considerable amount of the whole population's funds (see e.g. Swartz, 1999). This paper studies the needs of mature Finnish bank customers, and their reasons for the adoption and non-adoption of Internet banking. The study is founded on some recently published postulates concerning the impact of ageing population, their changing needs, and information technology on services marketing. Marketing to maturity One common mistake marketers often make in developing strategy is believed to be the use of stereotypical profiles of older persons. The mature consumer market consists of older people who exhibit a great deal of variability with respect to the way they look, think and act (Moschis et al., 1997; Shortt and Ruys, 1994; Caballero and Hart, 1996; Dychtwald, 1997). Because the effectiveness of marketing strategies and programs varies by type of segment and type of product, decision makers should rely primarily on information about older consumers' responses to marketing offerings, which are specific to the product or service being marketed as well as to the segment of interest (Moschis et al., 1997). Factors to take into account Marketing banking services to mature consumer markets should take into account at least three factors. First, mature customers are not a homogeneous segment of the retail banking market. Bone (1991) and Kennett et al. (1995) have demonstrated empirically the fragmentation of the mature consumer segment in the financial services industry. This non-homogeneity implies that any segmentation of mature customer markets will be by necessity based on more variables than just one. Possible segmentation criteria include demographics, attitudes, and customer perceived benefits. Second, as Mattila's (2001, pp. 86-92) empirical study points out, mature customers appreciate and also demand face-to-face banking services. The provision of personal services is expensive, and the differentiation of services by segments becomes important, and the need for tailored services, discounts, and special offers will grow. Third, mature customers tend to be more conservative toward, and have more difficulties in learning to use new types of financial services and technologies than young consumers (Kennett et al., 1995). This brings out the questions of segment-differentiated consumer education programs and entails calculations of cost-benefit ratios of the services, which are offered to various segments. It should be ensured that the service encounters favourably affect mature customers (Johnson-Hillery et al., 1997).
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Five key concepts

Leventhal (1997) argues that the mature markets respond to marketing efforts that reflect five key concepts of autonomy, connectedness, altruism, personal growth, and revitalization. Marketing communications that incorporate all of these five key concepts will be, for the most part, very well received by this market (see also Lavery, 2001). Leventhal (1997) suggests that one of the strongest things a marketer can do with the aging consumer is to create a positive relationship with him/her because of this segment's natural willingness to interact. Definite psychographic groups have been found to exist within the mature market segment. At least eight lifestyle groups among mature customers have been found (Burt and Gabbott, 1995). What is not clear, however, is to what extent those psychographic groups affect buyer perceptions and behavior (Oates et al., 1996). It has been found that the segmentation of the mature market is based essentially on five variables of discretionary income, health, activity level, discretionary time, and response to other people. From these five variables 32 potential segments can be generated (Burt and Gabbott, 1995). Kesner (1998) and Corlett (1999) have outlined some guidelines on how to market to the mature segment. They suggest the use of discounts and award programs to senior citizens, as well as special personal services, relationship marketing, and customer education. In this marketing effort, it is seen as essential that marketers approach the mature customer in a sensitive way, treating them as grandparents, not as seniors, oldies, or retirees (Direct Marketing, 2000).

Consumer education

Consumer education programs among mature customers are geared to improving the efficiency of their buying behavior (Fast et al., 1989; Oumlil and Williams, 2000). One of the main aims of mature customer education programs is to prepare them ``to confront more adroitly the vagaries of the marketplace'' (Oumlil and Williams, 2000). Education programs may become a win-win service. Mature consumers may increase their purchasing power because of more efficient buyer behavior, a higher level of personal satisfaction resulting from improved decision making, and an enhanced control over personal budgeting. Independent living and habitation in their own homes is what most mature customers in Finland want (Heikkila et al., 1999). The marketers also may benefit from such programs, because they will enjoy heightened customer loyalty, improved marketing effectiveness, and higher levels of customer satisfaction (Oumlil and Williams, 2000). In fact, Nielson and Curry (1997) claim that mature individuals are avid readers of financial materials and have time to absorb the information they request. They go on arguing that the actual process of learning and discovery brings mature personalities enjoyment in and of itself. Leventhal (1997) refers to mature customers as ``they listen, they read, they remember'', pointing out at the same time that the mature consumer segment is sceptical above all else. Adoption of new delivery channels in banking Mature customers are usually not seen as innovators or early adopters of new technologies, but rather belong to the late majority or even laggards in terms of adoption rates of new services (Oumlil and Williams, 2000). Elder et al. (1987) found that older workers in government finance organizations are more likely to experience technostress compared to younger workers. Similarly, Zeffane and Cheek's (1993) study of computer usage in an Australian

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telecommunications organization found that age is negatively correlated with computer usage. However, Teo (2001) has found that individuals across a wide range of ages engage in browsing and purchasing activities over the Internet. Also Karjaluoto et al. (2002) have found that investment services in particular have steady demand among mature consumers. Late adopters It is proposed here that the majority of the mature customers in the financial services sector belong to the late adopters or majority on the innovation diffusion curve rather than to the early adopters (see Figure 1). This proposal is verified with empirical data below, and the factors which create it are studied in more detail. However, even though over half of the mature banking customers seem to belong in the innovation adopter category of late adopters, we well demonstrate in this paper that mature customers do also use Internet banking and other financial services delivery channels as their primary modes of bill payment. This diversity is supported by the general idea of heterogeneity in the mature customer market. In general, the diffusion curve shown in Figure 1 depicts the cumulative adoption of a new technological innovation (Robertson, 1967; Moore and Benbasat, 1991; Rogers, 1995; Plouffe et al., 2000). Traditionally, the adoption continuum recognizes five categories of consumers that differ in terms of adoption rate: (1) innovators who are the first adopters, interested in technology itself with positive technology attitudes; (2) early adopters who are also interested in technology and are willing to take risks; (3) early majority who can be considered pragmatists and process oriented; (4) late majority who are more or less skeptical about technology with negative technology attitudes; and (5) laggards who have extremely negative technology attitudes and therefore never adopt technology among the mainstream (e.g. Moore, 1991; Rogers, 1995). Internet banking As the Internet banking adoption research has concentrated more or less on studying innovators and early adopters of the new technology, there is a limited amount of research available of mature customers' perceptions about Internet banking.

Figure 1. Mature banking customers on technology adoption curve

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Data collection Consumers' usage of online banking services in Finland is the highest in the world. The leading bank, Nordea has 1.4 million online customers, and 3.2 million log-ons monthly in a country of five million people. Osuuspankki Group is the second largest with over 500,000 online customers. The amount of online customers in different banks is proportionate to their market shares. All banks offer a full line of Internet services basic banking services, stock and bond trading, loan applications, consumption and student loan decisions, electronic bill presentment, international payments, and electronic salary presentment. Data collection The data of this research were collected by means of a questionnaire sent by mail to 3,000 individual bank customers in Finland. The survey sample consisted of three consumer segments (non-users, new users, old users) that differed in terms of Internet banking experience. Three questionnaires were partly tailored to these groups. After a follow-up round a total of 1,201 questionnaires were received, of which 1,167 were used in the data analysis. The response rate was 38.9 percent. We enhanced the survey data further with 30 in-depth interviews, which are also used to verify the results of the survey. The results of this study are derived from a sub-survey of 220 individuals, which was the amount of respondents over 65 years of age in the larger survey, and the interviews of 16 individuals. The mature customer segment was very well represented in our sample, because 18.9 percent of the sample was comprised of individuals over 65 years of age. Of the total population in Finland, only 5.8 percent belong in the group of mature customers. Results The proposition of Figure 1 that mature customers are late adopters of ebanking is supported by the data. Table I shows clearly that over half of mature customers belong in the group of late adopters in terms of their Internet banking adoption. Respondent characteristics Table II shows that 51.9 percent of the respondents are male and most (47.2 percent) belong to the group whose household income is less than 16,819e per year. The national average annual income was 25,380e in year 2000. Only about half of the mature customers (56.2 percent) were married, and the amount of widowers was high, as is expected in this age group. Education varied from elementary school (47.4 percent) up to a university degree (17.2 percent). Table II also depicts the most common modes of payment for each demographic variable (see also Figure 2). It can be seen from Table II that the mature customer segment is quite heterogeneous in terms of modes of payment. The heterogeneous nature of the mature customer segment has been supported by Nielson and Curry (1997), who found the mature market to be the most diverse of all. The mature customer will definitely try new products, but they will try them for different reasons than the younger market. They are going to try something if it can meet a personal, specific need that they have (see also Leventhal, 1997).
Early adopters (%) Mature customers Other customers 21.8 40.7 Majority (%) 23.7 29.6 Late adopters (%) 54.5 29.7

Table I. Mature customers as late adopters of Internet banking in Finland

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Demographic characteristics Gender Male Female Missing Total Household income Less than 8,409e 8,410-16,819e 16,820-25,228e 25,229-37,842e More than 37,843e Missing Total Marital status Married Cohabiting Single Widowed Divorced Missing Total Education Elementary school Technical school Business school University degree Other Missing Total

Frequency 109 101 10 220 36 57 50 22 32 23 220 117 7 14 43 27 12 220 99 16 21 37 36 11 220

Valid Most used mode percent of payment 51.9 48.1 Over-the-counter Pay service

Frequency Percentage 33/109 47/101 30.3 46.5

18.3 28.9 25.4 11.2 16.2

Pay service Pay service Over-the-counter Over-the-counter Internet

20/36 22/57 17/50 8/22 11/32

55.6 38.9 34.2 32.2 34.3

56.2 3.4 6.7 20.7 13.0

Pay service Direct debit Pay service Pay service Over-the-counter

35/117 2/7 7/14 25/43 11/27

29.9 28.6 50.0 58.1 40.7

47.4 7.7 10.0 17.7 17.2

Pay service Internet Over-the-counter Internet Pay service

40/99 5/16 9/21 11/37 14/36

40.4 31.1 42.9 29.7 38.7

Table II. Demographic profile of the mature bank customers

Figure 2. Distribution of primary modes of payment among the mature respondent

The mature consumer segment over 65s may be called old in terms of age, but they do not see themselves as old. It is a generally held belief that we are attracted to others whom we perceive to be similar to ourselves (see e.g. Johnson-Hillary et al., 1997). Therefore we mapped the respondents'
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self-perception and almost half of them characterized themselves as young (48.1 percent) and modern (46.2 percent). This finding is supported in Mathur et al. (1998), who also found that new-age elderly perceive themselves as younger in age and outlook, more in control of their lives, and more self-confident. This fact might be indicating that mature customers are young at heart, and willing to try out new forms of services such as Internet banking if we as a society just let them. Self-perceptions However, there were also mature customers who perceived themselves as dull-witted (36.6 percent) and only very few describe themselves as quick to learn (0.9 percent) new things. Such perceptions compared to the stereotype which mature customers had about a typical Internet banking user (e.g. computer genius and intelligent) might hinder the adoption of Internet banking among the mature customers:
I don't have anything against the Internet banking. It's just that I'm too old to pay my bills through the Internet (Male, 73 years).

Demographic variables may or may not be a useful tool for banks in their marketing planning (Stafford, 1996). In the case of Internet adoption, some demographics are good predictors of adoption rates. Mattila et al. (2002a) find that technical education, university degree and household income impact the use of Internet banking also in the case of mature customers. The use of bill payment service is the most popular mode of payment among the mature customers at 37 percent (see Figure 2).
I used to take my bills to a branch office, because I like talking to the bank personnel, and because I'm terrified about using any machines. But then I noticed how convenient it is to pay bills via ATM. I can pay my bills at the supermarket where I do my grocery shopping (Female, 68 years).

The second popular mode of payment is to pay bills over-the-counter at a branch office, at 29 percent, and in the third place is paying bills over the Internet with 12 percent. The latter is competing closely with ATMs. Derterminants of Internet banking adoption Some demographic variables, attitude toward computers, prior banking experience, prior technology experience, and reference group have been identified as determinants of Internet banking adoption (Sathye, 1999; Jayawardhena and Folex, 2000; Mattila and Pento, 2002b). On a scale from three (minor barrier) to three (major barrier) we tested nine variables we believed to affect the Internet banking adoption in the case of mature customers (see Figure 3). The variables were chosen as having potential on

Figure 3. Internet banking adoption barriers

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the basis of earlier studies, and the in-depth interviews. Notice now that not all the mature customers are non-users, and vice versa. The beliefs and perceptions of mature customers toward Internet banking seem to be stronger than other bank customers. Even though both the groups place the presented variables in the same order, the mature customers express their perceptions more strongly than the non-users in general. The lack of personal service was found to be the biggest barrier to adoption. Mature customers also listed difficulties with computers and Internet in general as well as security issues among the most significant barriers to adoption. Factor analysis To further verify the findings listed above, a factor analysis was carried out. Two statistical tests were conducted in order to determine the suitability of the factor analysis. First, the Kaisers-Meyer-Olkin (KMO) measure of sampling adequacy score of 0.785 was well above the recommended level of 0.5. Second, the Bartletts test of sphericity was significant (2 160:4, 36 p < 0.01), indicating that there are adequate intercorrelations between the items, which allows the use of factor analysis. Principal axis factoring was used as an extraction method and Varimax rotation was used as a rotation method. These methods have been widely accepted as reliable factor analysis methods (see e.g. Alexander and Colgate, 2000). Based on the suggestions of Child (1970), two factors were extracted using Kaiser's criterion (see Table II). In addition, gronbach's alpha was counted for each factor. For factor one Alpha was 0.84 and for factor two 0.78. Both scores are well above accepted levels (0.70) of basic research (Nunnally, 1978). Hence, the data set can be defined as reliable. The twofactor solution accounted 65.6 percent of the total variance. Two factors Two factors were created, both of which are easy to label (see Table III). The first factor accounts 50.3 percent of the total variance and is defined by five variables with factor loadings of 0.5 or higher. We call factor one ``Internal problems with the use of Internet banking'', because its variables refer to problems concerning computer, Internet, and Internet banking usage. The second factor accounts for 15.4 percent of the total variance and exhibits loadings for four variables. Factor two appears to be defined by a mix of items that are reflections of security concerns, price, and service issues. As they refer to external items affecting the use of Internet banking from outside, we label this factor as ``External constraints on the use of Internet banking''.
Statement Disappointment in using Internet banking Internet banking Web pages are confusing Use of computer or/and Internet is difficult Neither friends nor relatives use Internet banking Internet banking is only for computer nerds Internet banking is unsecured Internet banking is more expensive than going to a branch office Internet banking offers no receipt on payment Initial eigenvalues Total variance explained % Factor 1 loadings 0.942 0.769 0.568 0.561 0.528 Factor 2 loadings

0.839 0.753 0.637 1.38 15.4

4.53 50.3

Notes: Extraction method: principal axis factoring; Rotation method: varimax with Kaiser normalization

Table III. Internal problems and external constraints of Internet banking as adoption barriers among mature customers
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Some of the mature customers have actually tried using Internet banking, but have discontinued after disappointments. The majority of the usage disappointments were due to insufficient amount of training in the use of the Internet interface, which is given to the mature customers by bank personnel. The results of factor analysis presented in Table III provide insights into the adoption barriers of Internet banking among mature customers, which are explained in detail below.
I would use Internet banking if somebody just taught me how (Male, 70 years).

Lack of training

Even the expert Internet banking users complained that in the very beginning, nobody trained them or even showed them how to use Internet banking in practice. Also, the feeling of confusing Web pages might be solved with more careful initial training of customers. A large subsegment of mature customers thought that the Internet banking Web pages are confusing, and difficult to use. They felt that the pages are lacking sufficient guidance and that advice during use was almost impossible to get. Therefore the importance of pre-education in the use of Internet banking Web pages is even more emphasized. Mattila's (2001, pp. 129-33) empirical study points out that Finnish Internet banking customers in general consider Internet banking safe. This is not the case with mature customers, who find Internet banking more unsecured than bank customers in general. Only 0.6 percent of the under 65 segment responded that they have serious concerns of the security of Internet banking, against 26.4 percent of the mature customers.
If the hackers can get to Pentagon, imagine what they would do with my account (Female, 65 years).

Cost of services

Mature customers also thought that Internet banking costs them more than paying bills over-the-counter. Calculated on a transaction base, this is a misconception, because all Finnish banks charge less for their Internet services than their services over other channels. The reason for the higher cost is that mature consumers have less access to a Net-connected computer, and they thus add the cost of a computer and service provider fees to the transaction fees. A much higher proportion of the mature customers than the younger ones want personal service, and a printed receipt of their transactions. Figure 4 shows the perceptions on a scale of 3 +3 toward different services by the

Figure 4. Perceptions about technology-based services in relation to personal service

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mature segment, and all age groups. Senior citizens have positive perceptions of the long-established services: personal contact, teletext and credit and debit cards, and dislike practically all of the new services, especially e-mail and the Internet. Younger respondents have positive perceptions of personal service and the cards, but they also like the new services, especially mobile and Internet services. Attitude formulation A mature customer's perception toward electronic banking and toward computer use were discussed above as potential determinants of her adoption of Internet banking. Their object is to gauge the factors underlying the attitude formulation in Internet banking. In a conducted Chi-square test a positive computer perception was found to be strongly associated with mature customers' use of Internet banking (r = 0665, p < 0.01) (see Table IV). Of the mature customers, 76.3 percent never use Internet banking, and 41.5 percent of them indicated very negative computer perceptions. Conversely, 72.7 percent of mature customers with highly positive computer perceptions used Internet banking often or always. Usage and marital status Married mature customers are more likely to use Internet banking than unmarried or widowed ones. A total of 19.4 percent of married mature customers use Internet banking often while only 3.6 percent of unmarried customers used Internet banking often. The correlation between usage and marital status is low but significant (Spearman's rho = 0.204, p < 0.01). Mature men bank more over Internet than women, as is shown by a negative correlation coefficient (r = 0.239, p < 0.01) and 22.0 percent of all mature male customers bank over the Internet, but only 3.0 percent of females do the same. The level of education increases the likelihood of using Internet banking (r = 0.223, p < 0.01). Of mature Internet users, 30 percent hold a university degree, while e-banking is much less common among the less educated. Household income also correlates positively with usage (r = 0.398, p < 0.01). A total of 40.0 percent of mature customers with an annual household income more than 3,7843e use Internet banking, while only 5.6 percent of mature customers with an annual household income less than 2,5228e use Internet banking. Profession correlates positively with the mature customers' use of Internet banking (r = 0.221, p < 0.01). Mature customers with higher positions in working life tend to use Internet banking: 40.0 percent of the mature customers in leading positions use Internet banking, whereas over 90 percent of mature customers out of work have never used Internet banking. Household size is also positively correlated with usage (r = 0.168, p < 0.05).
Pearson chi-square value Computer attitude Marital status Gender Education Income Profession Household size 64.315 11.652 19.613 22.750 33.236 44.471 9.160 df 6 2 2 6 4 4 2 Asymp.Sig (two-sided) p-value 0.000 0.003 0.000 0.001 0.000 0.000 0.010

Table IV. Relationship between the use of Internet banking and mature customers
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As the mature customers' household size increases, the use of Internet banking becomes more popular. Discussion The results of this paper are especially valuable now when the populations nationwide are aging fast. It has been estimated that in the near future the mature customers will become the most important segment of all the customer groups. For example, it is expected that in Finland one-quarter of the population will be over 65 years of age by the year 2020, and in the USA one-fifth of the population will reach maturity in terms of age by the year 2030. Therefore, it is of utmost importance to better understand the behavior of this quite fragmented segment in the wireless environment. This paper created new knowledge about this behavior, and tried to understand the factors that drive the mature customer segment's online decisions. Alleviating hindrances The results of this paper confirm that mature customers are late adopters of Internet banking. The performed factor analysis indicates four main reasons for this: practical problems in using e-banking, concerns about the expensive start-up, security, and lack of personal service. These hindrances may be alleviated, for example, with education of mature customers to use e-banking, and by integrating personal services within the Internet bank interface. One alternative for incorporating personal service with e-banking would be the development of three-dimensional Web pages with voice recognition, and the ability to call a personal bank employee via a video connection. As the mature customers preferred teletext to current Internet banking delivery platforms, banks need to develop new electronic delivery channels for their products and services if they wish to reach the mature consumer segment. This means at least the extension of the current Internet banking from the PC and the mobile phone to digital television. The results of this study raise several questions for future research. While demographic factors and computer attitude had a significant influence on the use of Internet banking, future work should diversify the discussion into attitude development and research. Another implication for future research is to widen the scope of the study outside of Finland. One does assume that the mature consumer segments are not alike in different countries. As this study concentrated on segmentation criteria such as computer attitude and demographics, implications of the segmentation should be carried out by a statistical method, such as cluster analysis. One limitation of this study is also the fact that it comprised only of Finnish mature customers. Therefore, broadening the scope of this study abroad would provide banks with valuable cultural aspects when planning their international operations.
References Alexander, N. and Colgate, M. (2000), ``Retail financial services: transaction to relationship marketing'', European Journal of Marketing, Vol. 34 No. 8, pp. 938-53. Bone, P. (1991), ``Identifying mature segments'', Journal of Services Marketing, Vol. 5 No. 1, pp. 47-60. Burt, S. and Gabbott, M. (1995), ``The elderly consumer and non-food purchase behaviour'', European Journal of Marketing, Vol. 29 No. 2, pp. 43-57. Caballero, M. and Hart, M. (1996), ``Market dynamics: three- ``S'' tourism and the mature single lady'', International Journal of Contemporary Hospitality Management, Vol. 8 No. 2, pp. 10-13. Child, D. (1970), The Essentials of Factor Analysis, Holt, Rinehart & Winston, London. Corlett, C. (1999), ``Marketing to women 50+ on the Internet'', Vital Speeches of the Day, Vol. 66 No. 1, pp. 24-7.
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Direct Marketing (2000), ``Marketing to the 50+ consumer'', Direct Marketing, Vol. 63 No. 3, p. 41. Dychtwald, M. (1997), ``Marketplace 2000: riding the wave of population change'', Journal of Consumer Marketing, Vol. 14 No. 4, pp. 271-5. Elder, V., Gardner, E. and Ruth, S. (1987), ``Gender and age in technostress: effects of white-collar productivity'', Government Finance Review, Vol. 3 No. 6, pp. 17-21. Fast, J., Vosburgh, R. and Frisbee, W. (1989), ``The effects of consumer education on consumer search'', Journal of Consumer Affairs, Vol. 23 No. 13, pp. 65-90. Heikkila, J., Kallio, J., Saarinen, T. and Tuunainen, V. (1999), ``EC of groceries for elderly and disabled'', Information Technology & People, Vol. 12 No. 4, pp. 389-402. Henderson, C. (1998), ``Today's affluent oldsters: marketers see gold in gray'', The Futurist, Vol. 32 No. 8, pp. 19-23. Jayawardhena, C. and Foley, P. (2000), ``Changes in the banking sector the case of Internet banking in the UK'', Internet Research: Electronic Networking Applications and Policy, Vol. 10 No. 1, pp. 19-30. Johnson-Hillary, J., Kang, J. and Tuan, W.-J. (1997), ``The difference between elderly consumers' satisfaction levels and retail sales personnel's perceptions'', International Journal of Retail & Distribution Management, Vol. 25 No. 4, pp. 126-37. Karjaluoto, H., Mattila, M. and Pento, T. (2002), ``A study on Internet usage among bank customers in Finland'', AMA Winter Educators' Conference Proceedings. Kennett, P., Moschis, G. and Bellenger, D. (1995), ``Marketing financial services to mature customers'', Journal of Services Marketing, Vol. 9 No. 2, pp. 62-72. Kesner, R. (1998), ``10 tips for marketing to a mature audience'', Direct Marketing, Vol. 60 No. 11, pp. 52-3. Lavery, K. (2001), ``Educating adland is the advertising industry finally discovering the older consumer?'', Journal of Marketing Practice: Applied Marketing Science, Vol. 5 No. 6, pp. 5-9. Leventhal, R. (1997), ``Aging consumers and their effects on the marketplace'', Journal of Consumer Marketing, Vol. 14, No. 4, pp. 276-81. Lumpkin, J., Greenberg, B. and Goldstucker, J. (1985), ``Marketplace needs of the elderly: determinant attributes and store choice'', Journal of Retailing, Vol. 61 No. 2, pp. 75-105. Mason, B. and Bearden, W. (1978), ``Elderly shopping behavior and marketplace perceptions'', Southern Marketing Association Conference Proceedings, pp. 290-3. Mathur, A., Sherman, E. and Schiffman, L. (1998), ``Opportunities for marketing travel services to new-age elderly'', Journal of Services Marketing, Vol. 12 No. 4, pp. 265-77. Mattila, M. (2001), Essays on Customers in the Dawn of Interactive Banking, Diss. Jyvaskyla University Printing House, Jyvaskyla. Mattila, M. and Pento, T. (2002b), ``Mobile banking commercialization and innovation in retail banking distribution'', Die Banking und Information Technologie. Mattila, M., Karjaluoto, H. and Pento, T. (2002a), ``Customer channel preferences in the Finnish banking'', forthcoming in Journal of Marketing Channels. Moore, C. and Benbasat, I. (1991), ``Development of an instrument to measure the perceptions of adopting an information technology innovation'', Information Systems Research, Vol. 2 No. 3, pp. 192-222. Moore, G. (1991), Crossing the Chasm: Marketing and Selling Technology Products to Mainstream Customers, Harper Business, New York, NY. Moschis, G. (1991), ``Marketing to older adults: an overview and assessment of present knowledge and practice'', Journal of Services Marketing, Vol. 5 No. 2, pp. 33-41. Moschis, G. (1992), Marketing to Older Consumers, Quorum Books, Westport, CT. Moschis, G., Lee, E. and Mathur, A. (1997), ``Targeting the mature market: opportunities and challenges'', Journal of Consumer Marketing, Vol. 14 No. 4, pp. 282-93. Nielson, J. and Curry, K. (1997), ``Creative strategies for connecting with mature individuals'', Journal of Consumer Marketing, Vol. 14 No. 4, pp. 310-22. Nunnally, J. (1978), Psychometric Theory 2, McGraw-Hill, New York, NY. Oates, B., Shufeldt, L. and Vaught, B. (1996), ``A psychographic study of the elderly and retail store attributes'', Journal of Consumer Marketing, Vol. 13 No. 6, pp. 14-27.
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Oumlil, A. and Williams, A. (2000), ``Consumer education programs for mature customers'', Journal of Services Marketing, Vol. 14 No. 3, pp. 232-43. Plouffe, C., Vandenbosch, M. and Hulland, J. (2000), ``Why smart cards have failed: looking to consumer and merchant reactions to a new payment technology'', International Journal of Bank Marketing, Vol. 18 No. 3, pp. 112-23. Robertson, T. (1967), ``The process of innovation and the diffusion of innovation'', Journal of Marketing, Vol. 31 No. 1, pp. 14-19. Rogers, E. (1995), Diffusion of Innovations, 4th ed., The Free Press, New York, NY. Sathye, M. (1999), ``Adoption of Internet banking by Australian consumers: an empirical investigation'', International Journal of Bank Marketing, Vol. 17 No. 7, pp. 324-34. Sherman, E. and Brittan, M. (1977), ``Contemporary food gatherers: a study of food shopping habits of elderly urban populations'', The Gerontologist, Vol. 13, Autumn, pp. 358-63. Shortt, G. and Ruys, H. (1994), ``Hotel security: the needs of the mature age market'', International Journal of Contemporary Hospitality Management, Vol. 6 No. 5, pp. 14-19. Stafford, M. (1996), ``Demographic discriminators of service quality in the banking industry'', The Journal of Services Marketing, Vol. 10 No. 4, pp. 6-22. Swartz, L. (1999), ``Marketing to maturity'', Franchising World, Vol. 31 No. 6, pp. 47-50. Teo, T. (2001), ``Demographic and motivation variables associated with Internet usage activities'', Internet Research: Electronic Networking Applications and Policy, Vol. 11 No. 2, pp. 125-37. Zeffane, R. and Cheek, B. (1993), ``Profiles and correlates of computer usage: a study of the Australian telecommunications industry'', Computers in Industry, Vol. 22, pp. 53-69. Further reading Davis, F., Bagozzi, R. and Warshaw, P. (1989), ``User acceptance of computer technology: a comparison of two theoretical models'', Management Science, Vol. 35 No. 8, pp. 982-1003. Gardner, D., Johnson, F., Lee, M. and Wilkinson, I. (2000), ``A contingency approach to marketing high technology products'', European Journal of Marketing, Vol. 34 No. 9/10, pp. 1053-77. Gatignon, H. and Robertson, T. (1989), ``Technology diffusion: an empirical test of competitive effects'', Journal of Marketing, Vol. 53 No. 1, pp. 35-49. Moriarty, R. and Kosnik, T. (1989), ``High-tech marketing: concepts, continuity and change'', Sloan Management Review, Vol. 30, Summer, pp. 7-17.

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This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present

Executive summary and implications for managers and executives

Internet banking is well developed in Finland The proportion of people in Finland who have adopted online banking is higher than anywhere else in the world. All Finnish banks offer a full range of Internet banking services. As early as 2000, almost 40 per cent of all retail banking transactions in Finland were made over the Internet. Mattila et al. examine how Finns aged over 65 perceive Internet banking. Mature customers tend to be late adopters Different people have different attitudes towards new technology. Innovators, who are interested in new technology and positive towards it, tend to be the first people to adopt a new technology. Early adopters are also interested in technology and willing to take risks. The early majority can be considered pragmatists and process-orientated, while the late majority are more or less sceptical about technology and have negative attitudes towards it. Finally, the laggards have extremely negative attitudes towards technology and are not among the mainstream in adopting it. People aged over 65, although not, of course, an homogeneous group, tend generally to be among the late adopters of new technology. Over half the mature customers in the authors' survey were among the late adopters of Internet banking. The results in detail More than three-quarters of mature customers in the survey never used Internet banking, and more than 40 per cent of them had very negative views of computers. Married mature customers were more likely to use Internet banking than non-married or widowed ones. Mature men banked more often over the Internet than mature women. More-educated mature consumers were more likely to use Internet banking than less-educated mature consumers. And Internet banking was more common among higher-income mature customers than among lower-income over-65-year-olds. Mature customers who had held more responsible positions in working life were more likely to use Internet banking that those who had held less responsible positions. And Internet banking was more popular among mature customers from larger households than among those from smaller households. More than 30 per cent of wealthy and well educated mature males in Finland used e-banking as their main method of making payments. Among non-users of Internet banking, mature and younger groups shared similar perceptions and beliefs, but the mature customers expressed them more strongly. The lack of personal service was found to be the biggest barrier to adoption, followed by difficulties with computers and the Internet in general, and security issues. Some mature customers expressed concern about high start-up costs of using Internet banking. A number of mature customers wrongly believed that Internet banking cost more per transaction than conventional methods. Among mature customers who had discontinued using Internet banking after trying it out, most blamed insufficient or non-existent training in how to use the new technology. Many found the web pages confusing and difficult to use.

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How banks should react The survey results assume significant importance since a quarter of the Finnish population is expected to be aged over 65 by 2020. Banks need to pay more attention to educating mature customers on how to use Internet banking, and integrating personal services with the Internet bank interface. Possibilities include developing three-dimensional Web pages with voice recognition, using video technology to give access to a bank employee and extending Internet banking from personal computers and mobile telephones to digital television. (A precis of the article ``Internet banking adoption among mature customers: early majority or laggards?''. Supplied by Marketing Consultants for Emerald.)

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