ICT and Rural Banking: Evidence from Sri Lanka

Abstract

ICT has transformed the banking industry by making online banking, mobile payments, and digital financial services more efficient and accessible. While it enhances user convenience and financial inclusion, considerable challenges remain, including cybersecurity risks, high costs, and low uptake in rural areas. This study aims to analyze the impact of ICT on rural Sri Lankan banking by concentrating on the transition to online banking, its implications for accessibility and efficiency, consumer difficulties with e-banking, and suggestions to enhance trust, usability, and financial inclusion. The researcher selected 100 bank customers and management officers from five major commercial banks in Anuradhapura district, North Central Province, Sri Lanka. To examine the usage, awareness and customer experience with e-banking and mobile banking, an anonymous open-ended questionnaire was distributed through personal contacts, social media and bank visits. Additional information about digital banking users was obtained from the participating banks. The acquired data were pre-processed to ensure completeness before analysis using SPSS. The questionnaire responses were categorized for thematic significance, allowing for qualitative and quantitative interpretations. Comparisons were made between banks to analyze the usage and trends of ICT in rural areas. According to the results, ICT initiatives have improved rural financial inclusion in Sri Lanka. However, despite widespread use among the youth, adoption of online banking, in particular, remains low due to low digital literacy, inadequate infrastructure, security concerns, and aversion to cash. ICT's effects on Sri Lanka's banking industry have mostly been studied in urban areas, with little attention paid to the rural experience.  Despite the fact that districts have been examined, the results mostly represent urban viewpoints. To address this gap, this study looks at how ICT affects rural banking experiences using Anuradhapura as a case study.