Italy Lags Behind In Electronic Banking

The Internet is fully integrated in the Italian banking system, but Italy still stands as an eBanking laggard in comparison to the rest of Western Europe.

Many Italians do not use the Internet nearly as often as their EU counterparts. Italian consumers who have started to use the web for online banking are far more hesitant towards the online channel.

There are several reasons for the slow adoption in Italy, including Italy’s long history of cash use. The country's traditional payment system has created a complacent attitude amongst consumers, who see no need for new channels of banking.

A recently published academic journal, A Behavioural Model of eBanking Usage in Italy written by Guendalina Capece and Domenico Campisi, aims to discuss the current eBanking ecosystem in Italy and how to increase consumer satisfaction to adopt such services.

The authors acknowledge that Italian banks are showing great improvement in terms of new banking technology and the integration of new channels. However, Italy's banks are still far from being leaders in online banking innovation.

Through extensive research and analysis, the researchers hope to answer how the Italian financial sector can discover new strategies to enhance customer satisfaction as well as promote further growth for eBanking services in Italy.

For the purpose of this article and research, eBanking is defined as "the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive and communication channels."

Italy's Current Banking Landscape

All consumers are demanding new strategies for convenience and added value when it comes to banking services, which is a trend that is not exclusive to Italian banking. However, in the last few years, Italian banks have used developments in online channels to attract new customers and move away from traditional "brick and mortar" services.

The country's heavy cash use, which led to its nickname, "The Grey Economy," is partially due to certain regions in Italy where there is a low degree of financial sophistication. The lack of banking innovation has contributed to the consumers paying in cash and using traditional branch services. On the supply side, financial institutions in Italy have developed a large ATM network that further encourages cash withdrawals and banking through cash points.

The Italian government has imposed fixed costs for banks, which makes it expensive for consumers to open and maintain an account in Italy. Bank branches are still key in the Italian banking system, since they are the ones who are actually managing the accounts, whereas other countries handle accounts at central headquarters.

Most financial services can be completed through online banking, however there are still certain transactions that can only be done at the branch where the account was initially created. Consumers still prefer traditional banking interaction because they are wary of online security and feel face-to-face banking is more personable.

On the other hand, Italy's current banking system and lack of eBanking services have contributed to a slowing within the financial market. Moreover, Italian banks are not highly competitive in the international market.

How Italians Can Benefit From Online Banking

Researchers believe that there are many advantages of online banking that cannot be offered through offline banking. Capece and Campisi highlight the need for banking managers to optimize these opportunities. The authors suggest there are two major benefits that stem from adopting online banking services, which they categorized as direct and indirect advantages.

Direct advantages are identified as immediate and tangible rewards that customers receive through the engagement of online banking. An example of this would be a wide range of increased benefits such as information transparency and accelerated transaction speed. Financial benefits would include fewer transaction handling fees and extra loyalty programs. Online banking also has the ability to decrease long documentation processes while saving consumers time and preventing errors and delays.

Additionally, this process usually required less personnel on the banking side, which would mean less costs for banks. Banking transactions can still be mediated online through websites and electronic data.

Lastly, consumers are given extended and complete access through online banking. Location and time no longer limits access to banking accounts and transactions.

The authors also list these as the intangible benefits, which are extremely difficult to measure. Indirect advantages also include the customer's ability to enjoy banking anywhere in the world regardless of time.

Customers are also given news updates such as stock quotations. However, measuring the level of consumer satisfaction and its success rate is often inconsistent and is difficult to analyze. The authors created a behaviour model for research in effort to better understand the Italian's consumer attitude towards online banking.

Implications Of The Study

The author's study results underscored several important issues relating to customer attitude and how to encourage mass adoption of online banking in Italy.

Firstly, the study revealed that most Italian customers enjoy online banking because it is easy to use, but are hesitant of the quality of online instruments. This finding is important for banking managers who are developing strategies in attempt to expand customer base. Customers want online banking services that deliver quality transactions, yet are still easy to use.

Banking managers need to find ways to build confidence amongst users to encourage them to adopt online banking. Moreover, managers must create strategies that inspire and attract new customers while simultaneously reassuring them that such services are secure and simple. 

It is important to remember traditional Italian culture involves a lot of personal interaction, therefore in order to change strong-rooted consumer behaviour, banking managers need to alter their approach.

To read the full report click here.



The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

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