This chapter included several part of study. The first part of study is research background and this part is discussed overall environment and trends of internet banking in banking industry. The second part is problem statement, it is explained the important and the foundation of study. Next, there are five specific objectives of this study which are stated in the research objective. The next part of study is research question. The questions are stated the how the factors that can affect the consumers’ behavioral intention to use online banking in consumer view. Continue by the part of significance of the study that explain the important and contribution of the research. And the last two parts of study are chapter layout and conclusion.
Banking institution is a hub of towards economic growth and the technological innovations and delivery through electronic distribution channel is e-banking. Online banking is a practice of handling all the bank transactions through internet which enable the user to do their transactions through internet. Nowadays in a global business world, many businesses it relies on to banking information for cash flow reviews, auditing and daily financial transaction processing. Thus, with the ease of online banking, account holder can be rapid access and efficiently executed the transaction. Thus in the banking and finance field, online banking has become rapidly of revolution. Rayport and Sviokla (1994) indicated that in the future, businesses will compete not only in the physical market, but it also in the virtual market (online technology). That is there will have more and more companies will switch their business models from the physical to the virtual market (Lee, Tsai & Corazon, 2011). In the past three decades, the financial institutions offered various types of new financial products or banking services to retain the existing customer and attract more new customers of the banking development. An electronic banking channel has been use as the technology adds new dimensions to the classic banking systems and grown substantially in the past few years. The self-service technologies enable the banker collecting information and communicating with customers without face-to-face interaction, it can save the transaction time and cost through the banking systems (Calisir, Gumussoy, 2008). It also can enabled banks to enhance it financial management. First introduce in the early 1980s, the banks in the financial sector has emerged the first self-service technologies that is installed the first automated teller machines (ATMs). This was followed by telephone banking services in the 1980s, and in the 1990s, with the emergence of the Internet; banks has offering web-based banking applications as extended their existing distribution channels. According to Weir, Anderson and Jack (2006), Online banking services allow customers to use remote easy access to manage bank accounts and transactions. Nowadays, banks provide a complete range of financial services through their online banking channels because they are more cost-effective than other customer-contact channels (Gopalakrisnan, Wischnevsky, & Dmanpour, 2003; Polatoglu & Ekin, 2001) with less staff and fewer physical branch requirements (Cheng, Lam, & Yeung, 2006). In Malaysia, online banking has the potential to lead technological developments that to transform in the financial industry. In the points of view, it benefits to businesses and consumers in long term. Financial institutions in Malaysia is keep rapidly evolving technologies and taking initiatives action to improve the delivery level of channels in banking system. The change in consumer behaviour is reflected in the increasing use of electronic payment systems. At 1st of June 2000, Bank Negara Malaysia (BNM) has approved the domestic banks to leap into the Cyber Wagon. So effective from June 1st, Bank Negara Malaysia (BNM) allowed local banks to offer banking transaction through internet (BNM, 2000). In the same time, Malayan Banking Berhad (Maybank) became the first to introduce its own Internet banking services with about 45,000 active users as at October 2000, followed by Hong Leong Bank and the others. According to Ndubisi and Sinti, 2006, the results have shown the there are still low online banking adoption in Malaysia. On the other hands, in 2002, the number of interbank GiroA payments has been increase more than twice, while through Internet banking transfer funds and bill payments that have been conducted in on an increasing trend. According to Mattila and Dandapani (n.d), online banking services can provide speedy, save time, more accurate of data and information and convenient banking opportunities. In addition, customers can enjoy the new banking services benefits such as paying bills online, finding mortgages or auto loans, applying for credit cards and locating the nearest ATM or branch office. On the other hand, Internet banking offers banks many opportunities such as an additional delivery channel, low-cost banking, profitable banking, quality banking, and allows them to sell products customized to individual needs.
Although online banking is still on the stages of product development, this paper revealed that there are low adoption rate of online banking in Malaysia due to many consumer yet to adopt the online banking services. when business models switch from a physical to a virtual market, the constructs of attitude and behavioural intention to use cannot fully reflect users’ acceptance of the virtual market because user acceptance of the virtual market implies that will cause they reduce the use of the physical market. Online banking enable account holder to access their bank account in home with various banking services such as online payment, online transfer, checking balances history and so on.
This research objective is to determine the consumer behavior that affected their intention to adopt behavior by using online banking. It is also to identify the significant relationship between consumers view of risk.
This paper is to examine the potential effects of risk on the adoption and use of new technologies services instead of the traditional point of view of the attitude and intention towards use of the self-technology services. The technology acceptance model (TAM) is utilized to investigate the attitude and behaviour towards switching to online banking. Thus, the objective of our research study is to analyze the effect of risks associated with the consumer behavioral intention to use online banking during the relatively early stages of its market development. Through this research stream, it can help us to characterize the development in banking system.
In conclude that our main objective is: (i) To examine the relationship between financial risks and consumers’ behavioral intention to use online banking (ii) To examine the relationship between performance risks and consumers’ behavioral intention to use online banking (iii) To examine the relationship between time risks and consumers’ behavioral intention to use online banking (iv) To examine the relationship between social risks and consumers’ behavioral intention to use online banking (v) To examine the relationship between security risks and consumers’ behavioral intention to use online banking
Q1: Does financial risks affect consumers’ behavioral intention to use online banking? Q2: Does performance risks affect consumers’ behavioral intention to use online banking? Q3: Does time risks affect consumers’ behavioral intention to use online banking? Q4: Does social risks affect consumers’ behavioral intention to use online banking? Q5: Does security risks affect consumers’ behavioral intention to use online banking?
Since internet banking is quite popular among consumer nowadays, most of the companies are using online banking for their business transaction. Online banking is usually for consumers to make transaction such as booking ticket online, purchasing product online, transfer money, paying utilities and so on. The importance of this study is to provide bank and consumer a brief idea on the few types of risks and the most significant risk when adopting internet banking. Based on Yu-Qian & Chen (2012), trust is identified as a key mediator of fairness to customer satisfaction. Besides, risk was one of the factors which do influence the rate of adoption of internet banking in Malaysia. (Norazah, M. S., 2010). Thus this paper will figure out whether financial risk, performance risk, time risk, social risk and security risks will affect much on customer decision in using internet banking. In addition, bank also can increase their awareness on the risks so that precaution can be done earlier. By doing this, banks are able to provide an assurance to their clients so that they would able to maintain a competitive quality of service in the future and avoid from losing their clients to their competitors. (Jenkins, H., 2007). The results will helps to increases the confident level of consumer in using online banking in any kind of activities. If consumers are able to identify the types of risk in the online banking, they can deal with the online banking without any hesitation. In the study, it explained how each risk influence on consumers’ behavioural intention to use online banking so it is possibly useful for the consumer and bank to be aware of these risks. By gaining understanding of the reason behind the each of the risks such as financial & security risk, helps consumers and companies to understand more about the risk that related to online banking and this knowledge might become the resource of their competitive advantage. To date, most Internet banking studies focus on specific countries such as U.S (Vatanasombut, Igbaria, Stylianou& Rodgers, 2008; Murillo, Gerad& Roberto, 2010; Lee, Rao, Clifford, Karin & John, 2012), U.K (Mahmood& Feroz, 2006; Bander& Charles, 2010; Mark, Deirdre, Gwyneth& Stephen, 2008; Frank, Stavros, Lesley, Phillip& Markos, 2012), Taiwan (Ho & Wu, 2009; Tsai, Huang, Liu, Tsaur& Lin, 2010; Lee, Tsai, Lanting& Maria, 2011), Hong Kong (Cheng, Lam & Yeung, 2006; Yiu, Kevin & David, 2007), Finland (Kuisma, Laukkanen& Hiltunen, 2007. Numerous studies in individual countries accentuate the factors that influence consumer behavior in adopting Internet banking. Despite the importance of understanding how each risks influence on consumer behavior when adopting internet banking, this issue is not addressed in previous studies. Most studies focused narrowly only one risk in their research. For example, Norazah (2010), Yiu, Granf & Edgar (2007), and Sanayei & Noroozi (2009) focused on the effects of perceived risk towards the adoption of internet banking. Other studies mainly concentrated on the influence of perceived security on Internet banking acceptance (Hutchinson & Warren, 2003; Subsorn & Limwiriyakul, 2012; Katariina, Sudhir, Hannu & Nina, 2008) Nevertheless, there is also a limited finding for the types of risk that influences consumer behavior in adopting Internet banking in Malaysia. It is evidence from the literature that the past technology adoption research has primarily enhanced and focus on the positive utility gain to the system adoption such as ease of use, perceived usefulness and so on (Featherman and Pavlon, 2003). Some of the researcher (Johnson, 2004) has argued that the consumer research has forgotten about the risk.For instance, Zavareh, Ariff, Jusoh, Zakuan & Bahari, 2012 only test on the reliability of the internet banking while Norazah, 2010 examined on factor affecting the Internet banking adoption among consumers which include perceived risk. Besides, Mozie, Ghazali & Mustapha, 2012 focused on the perceived trustworthiness and behavioral intention to use Internet banking. In Malaysia, previous studies examined on internet banking acceptance were limited too. For example, Sadiq Sohail & Shanmugham (2003) found that internet accessibility, security concerns and customers’ reluctance to change had significantly influence the adoption of internet banking. Based on Norazah, M. S. (2010) findings, it indicated that perceived risk has a significant negative relationship with internet banking adoption is rejected. So risk is considered by user when adopting internet banking. Noorizan, Munirah & Norfazlina (2012) figure out that perceived integrity, perceived trustworthiness, perceived benevolence and perceived ability has low to moderate degree of relationship towards behavioral intention where perceived integrity found to be the most important dimension towards the consumer intention to use e-banking service. Hence, this study needs to find out the main reason behind on how many percentages of non-internet banking acceptances in Malaysia. Despite the importance of understanding how each risks influence on consumer behavior when adopting internet banking, this issue is not addressed in previous studies. Most studies focused narrowly only one risk in their research. For example, Norazah (2010), Yiu, Granf & Edgar (2007), and Sanayei & Noroozi (2009) focused on the effects of perceived risk towards the adoption of internet banking. Other studies mainly concentrated on the influence of perceived security on Internet banking acceptance (Hutchinson & Warren, 2003; Subsorn & Limwiriyakul, 2012; Katariina, Sudhir, Hannu & Nina, 2008) Therefore, in order to fill these gaps, this study examines five types of risk such as financial risk, security risk, performance risk, time risk and social risk that influence consumer behavior in adopting online banking.
In chapter 1, this paper has explained the purposes and importance of this study in the problem statement and the significant of the study. Besides, this paper sets forth the research objective to be achieved, research questions to be answered, research background. While in chapter 2, this paper will provide the detailed explanations of the independent variables and dependent variables that this paper are studying. The process of identifying the relevant data source and extracting the relevant information will be involved during writing the literature review. Next will be chapter 3, this paper are describing how the research will be carried out in term of research design, data collection method, sampling design, research instrument and construct measurement. By the way, the linkage to chapter 4 will be provided in data processing, data analysis and the conclusion of this chapter. This chapter presents the pattern of the result and analyses of the result which are relevant to the research question and hypothesis. Besides, this paper is going to use the SPSS software to assist us in analyzing and understanding the result of the research. Last but not least, summary of the statistical analyses and major finding will be given in chapter 5 and also implication and limitation of the study will be discussed. In addition to this, recommendation for the future research and the overall conclusion of the entire project will be provided.
In chapter 1, this paper has introduced the research topic by discussing the background, importance, objective, purpose and the relevant variable of the study. In addition, this paper also outlined each chapter of the research report in this chapter. The further relevant information and variables that related to the study will be discussed in chapter 2.
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