The COVID-19 pandemic fundamentally reshaped the way Indians interact with their banks. As physical branches closed and contactless transactions became the norm, online banking transformed from a convenience into a necessity. Yet, adoption was not simply a matter of technology, it was also about trust, sustainability, and accessibility. A recent study by Cheng-Wen Lee, Sephali Bera, Ping-Hung Chen, and Feng-Yi Lin (2025) explores precisely these drivers, offering fresh insights into why millions of Indians embraced digital banking in the post-pandemic era. (MDPI, Businesses 2025)
India’s banking sector has experienced explosive growth over the past decade. From liberalization in the 1990s to the rise of fintech platforms, digital banking has steadily gained traction. Yet, the pandemic accelerated the shift dramatically. In 2020 alone, over 113 billion online banking transactions were recorded in India, amounting to INR 2,086 trillion in value (RBI Annual Report, 2023). These numbers underline a profound structural shift: customers are increasingly prioritizing ease of use, accessibility, and ESG considerations over traditional concerns like system reliability.
“The pandemic taught customers to value convenience and trust in digital channels, but also to look at the broader sustainability and ethical practices of their banks,” notes Dr. Bera, co-author of the study.
The research builds on the Technology Acceptance Model (TAM), integrating traditional factors like perceived ease of use (PEOU), accessibility (ABS), and reliability of the banking system (RBS), alongside a novel factor: perceived ESG performance (PESGB). The results were revealing: PEOU, ABS, and PESGB significantly influence adoption, whereas RBS had surprisingly little impact.
Accessibility has emerged as a key driver in online banking adoption. With India’s 1.2 billion mobile subscriptions, digital banking platforms have the potential to reach urban and rural populations alike. “Accessibility is more than having an app; it’s about intuitive interfaces, local language support, and low barriers for first-time users,” explains Ping-Hung Chen.
Innovations such as Immediate Payment Service (IMPS), Unified Payments Interface (UPI), and mobile-first banking apps have made financial transactions faster, safer, and more inclusive. IMPS alone has facilitated millions of real-time transactions daily, while UPI now handles billions of transactions monthly.
Moreover, accessibility is crucial for bridging the digital divide. Research highlights that banks with user-friendly platforms, multilingual support, and robust customer education programs are more successful in attracting new customers, particularly in Tier-2 and Tier-3 cities.
Perhaps the most novel insight from the study is the role of environmental, social, and governance (ESG) considerations. Customers are increasingly aware of sustainability, ethical practices, and corporate responsibility. Banks that actively promote ESG initiatives,such as green financing, reduced carbon footprints, or social lending,are not only enhancing their reputation but also influencing digital adoption.
For example, HDFC Bank’s green loans and SBI’s sustainability-linked initiatives resonate with a growing demographic of environmentally and socially conscious users. Dr. Lee observes, “Sustainability is no longer peripheral. For many customers, ESG alignment is a factor in choosing a banking platform.”
Data from the study shows a positive correlation between PESGB scores and customer intention to adopt online banking, confirming that sustainability is becoming a competitive differentiator.
Usability and the Digital Experience
While accessibility and ESG matter, the research reinforces that ease of use remains paramount. Platforms must offer seamless navigation, intuitive dashboards, and consistent uptime. Features like biometric login, AI-powered chatbots, and real-time transaction tracking are not luxuries,they are essential tools for retaining digitally-savvy users.
In practice, banks like ICICI and Kotak Mahindra have successfully leveraged these features. Kotak’s 811 app, for instance, allows users to open accounts digitally in minutes, transfer funds, pay bills, and manage investments,all from a mobile device. User surveys indicate that simplicity and clarity directly enhance adoption rates.
Reliability: A Surprising Non-Factor
Interestingly, the study found that traditional reliability metrics,such as server stability or transaction accuracy,were not significant predictors of adoption. This suggests that in the post-pandemic era, customers assume a baseline level of reliability and instead prioritize value-added features, convenience, and ESG alignment.
This aligns with the broader trend in fintech: users expect core banking functions to work flawlessly by default; differentiation comes from experience, accessibility, and corporate responsibility.
The Broader Impact: Financial Inclusion and Digital Literacy
The implications extend beyond convenience. Online banking adoption is a key lever for financial inclusion, especially in rural India. Small finance banks, payments banks, and fintech platforms have enabled previously unbanked populations to access credit, savings, and insurance.
The study also underscores the importance of digital literacy. Without adequate training and awareness, adoption stalls. Banks are addressing this through tutorials, multilingual support, and proactive customer outreach. Initiatives like SBI’s digital literacy programs and ICICI’s video tutorials demonstrate the value of combining technology with education.
Post-Pandemic Insights and Strategic Implications
The post-pandemic era has created a banking landscape where technology, ESG, and accessibility converge. Key strategic takeaways for banks include:
“The pandemic accelerated digital banking, but the next phase is about sustaining adoption through inclusivity, sustainability, and seamless experiences,” observes Feng-Yi Lin, co-author of the study.
Real-World Examples
These examples demonstrate that online banking adoption is not just about technology, but a holistic combination of user experience, ethical practice, and social impact.
Post-pandemic India presents a unique opportunity for banks to rethink their strategies. Adoption of online banking is no longer driven solely by reliability,it is increasingly influenced by accessibility, ease of use, and ESG commitment. As fintech and digital platforms continue to evolve, banks that prioritize these dimensions will not only attract more users but also strengthen financial inclusion, sustainability, and trust.
Digital banking in India is now more than transactions,it’s a reflection of values, accessibility, and empowerment. By embracing ESG, ensuring intuitive platforms, and educating users, banks can create lasting relationships in a post-pandemic world that values sustainability, convenience, and inclusivity.
References:
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