Exploring the Relationship Between Household Income and Online Banking Engagement in the Sri Lankan Context

Abstract

The advancement of digital technology has significantly transformed the global banking sector, with online banking becoming a vital tool for financial accessibility and convenience. Despite Sri Lanka’s increasing digital infrastructure and high general literacy rate, the actual usage of online banking services remains critically low particularly in rural areas. This study investigates the relationship between household income and online banking engagement, aiming to understand how income disparities influence online banking behavior. A quantitative approach was adopted, using a structured questionnaire administered to a sample of 382 bank customers in the Balangoda Divisional Secretariat Division of the Ratnapura District in the Sri Lanka. Data were analyzed using ANOVA to examine the variance in online banking usage across five income categories. The results reveal a statistically significant difference in online banking engagement among different income groups (p < 0.05), with higher-income households demonstrating greater usage. The study concludes that income plays a critical role in shaping digital financial behavior. Therefore, it is recommended that financial institutions and policymakers implement targeted strategies such as digital literacy programs and accessible banking tools tailored to lower-income groups, in order to enhance digital financial inclusion and reduce income-based disparities in online banking usage.