Factors influencing Acceptance and Adoption of Automation of Banking Sector in India using Theory of Diffusion of Innovation

In a developing country like India with a diversified customer base, acceptability and adaptability are always challenging in case of any innovation. This study aims to identify the factors responsible for the smooth acceptability and adoption of various automation initiatives in the Banking sector in India. The theory of diffusion of innovation is applied to understand customer psychology concerning the adoption of innovation, and the confirmatory factor analysis technique is employed to extract factors influencing the acceptance and adoption of banking automation. This study finds out that the acceptability and adaptability of automation in the banking sector are increasing gradually daily. Many factors were formed based on prior literature, diffusion of innovation theory, and their importance concerning customer psychology for accepting innovation in the banking system. Based on confirmatory factor analysis, service quality, system administration, improvisation, sustainability, convenience, external influence, trust, outcome, and utility parameters were identified as critical factors affecting the adaptability and acceptability of automation in the banking system. This research aims to identify factors that influence the acceptance and adoption of gradual automation incorporated in the banking system occasionally. This study does not deal with the acceptance and adoption of other legal, structural, and regulatory changes that happened over the period. Also, this study deals with banking automation only related to customer interaction, adoption, and use of banking services.