tions through the Internet. Unlike traditional banking, these facilities do not provide face-to-face contact in what is essentially a one-to-one service relationship [ 5]. For Internet banking to compete effectively against traditional brick-and-mortar banking, service quality in other directions must be relatively higher. Among the challenges to market development in Internet banking [ 4] is the requirement that managers and strategists identify, measure, and compare the key determinants (such as usefulness, reliability, and security) of service quality. _{Usefulness USE}

Given the large number of variables that can poten- Ease of Use EOU tially affect service quality and the high decision costs ^{Reliability REL} if enhancement is sought _{Security SEC} in each and every dimension, the idea of bounded ^{Responsiveness RES} rationality suggests that

Continuous
the opportunity set should Improvement IMP
be made as small as possi-
ble, that is, its size should
be “satisficed” in the sense
expounded by Simon. To
this end, we suggest an
approach under which service-quality attributes are
reduced to a core subset through analytical consider-
ations, after which the resulting core framework is
tested for empirical relevance. We show in terms of
survey data that all quality attributes entering the
core subset have a statistically significant effect on
consumer satisfaction with Internet banking, as
against quality attributes partitioned outside the core
subset.

In the literature, service quality is generally understood to depend on reliability, security, responsiveness, competency, courtesy, communication, credibility, access, empathy, and intangibles [ 8]. Under the Servqual protocol for quantifying service quality, determinants are distilled into basic categories involving reliability, responsiveness, assurance, empathy, and intangibles [ 7]. In studies where the standard Technology Acceptance Model (TAM), Servqual, and transaction cost analysis are used to measure consumer attitudes toward B2C e-commerce [ 3], empirical significance has been established for the perceived usefulness and ease of use under both the TAM and the quality dimensions of Servqual.

In Internet banking, the TAM and Servqual attributes that might potentially affect service quality present an embarrass des richesse. If enhancement is sought in each and every dimension, then according to the theory of bounded rationality, such a situation

Schematic of the core framework.

can actually work against managerial efficiency. Through similar reasoning, the decision costs arising from such a large number of variables are readily reduced if the opportunity set is rationally made smaller. We therefore propose an approach under which, by reference to the research support established in the literature, the TAM and Servqual variables potentially affecting consumer satisfaction with Internet banking are reduced to a core subset.

This approachyields a framework containing six service-quality attributes—usefulness (USE), ease of use (EOU), reliability (REL), security

Consumer Satisfaction (SEC), responsiveness

^{toward Internet} Banking Services (RES), and continuous

improvement (IMP)— along with their reduced-form relationship to consumer satisfaction in Internet banking services (CSIBS) (see the figure here). Since the consumption or investment decisions underlying changes to individual cash balances are given under the framework’s other-things-being-equal conditions, we can defer consideration of the time-asymmetry effects that characterize plans implemented through e-banking, as against plans retracted through e-banking [ 2]. Our core framework is therefore applicable to Internet banking whatever the direction of monetary transactions.

Given the framework’s reduced-form structure, it is possible to introduce statistical analysis to test any choice of attributes in terms of empirical relevance. If a particular core framework is found to be valid on empirical, in addition to statistical, grounds, it can be applied to support decision-cost-effective and empirically prioritized management in Internet banking (such as in market development).

STRUCTURAL PROPERTIES

Under the bounded-rationality approach, whether a given service-quality attribute enters our framework is first determined by the general research support it enjoys in the literature and the extent to which it is applicable to Internet banking. We then subject any choice of the core subset to tests for empirical validity. In particular, we draw attention to concepts introduced under the fundamental TAM and Servqual paradigms and apply them to service-quality assessment and consumer satisfaction with Internet banking. We then obtain a core framework containing six perception-based constructs, together