Research Overview:
- First introduced in 1997, online banking is an innovation which has been widely and rapidly adopted in the UK: in 2024, 86% of UK adults accessed banking services through web and mobile channels.
- This research explored the mechanisms through which innovations diffuse across populations by analysing the adoption trajectory of online banking through key stages, including the evolution of the innovation from early web-based services to the introduction of mobile channels in 2011, the advent fintech neobanks such as Monzo from 2015 onwards, and the Covid-pandemic from 2019.
- Insights from the case of online banking are generalisable to understanding diffusion rates and trajectories of other emerging technologies, including AI. Diffusion is a social process at its core, with the awareness and understanding of a new innovation that results in individuals making positive adoption decisions spread through communication.
- Understanding the processes of diffusion, and the factors which can influence it’s rate, can be valuable for policymakers seeking to support and/or accelerate the adoption of new innovations, such as AI.
Theoretical Framework:
- This research primarily applied Diffusion of Innovation (DOI) theory, ****developed by the sociologist Everett Rogers, to analyse how new innovations spread through a social system over time.
Key Findings:
- The final paper explored the diffusion of online banking in the UK market from 1997 to 2024, using Diffusion of Innovation theory to identify and explain different stages of diffusion and variations in its rate over time.
Policy Insights:
- Understanding how and why innovations spread can be valuable for policymakers aiming to drive economic growth through the adoption of emerging technologies such as AI or Open Banking. Key insights include:
- Empirical DOI studies have identified the Innovativeness/Needs Paradox: those who could benefit most from an innovation are often the last to adopt it, explaining why the successive diffusion of new technologies may widen socioeconomic gaps. Adoption-focused policies may seek to anticipate and proactively address this dynamic.
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