Internet Banking

ABSTRACT

Internet banking started in 80s and nowadays it's considered globally as an essential need of today's modern banking facilities. The debate about moving secure investment and banking transaction to the web is indeed over because they are already in progress but analysis of the dimensions of this revolution are far from complete.

This research is done to reveal the views/perceptions of today's modern day customers about online banking. The main objectives were (a) customer's perceptions of the benefits of online banking (b) customers perceptions of the risks/the issues/threats/problems associated with the online banking. The outcome of the study may help the higher management of banks to plan and implement more secure and effective online banking services.

The researcher collected the primary data through questionnaires and then data was analyzed through frequency analysis and mean score analysis. The results show that online banking minimizes inconvenience, saves time, the cost of transaction and facilitates quick responses showed the highest mean scores i.e. 4.38, 4.26, 4.21, and 4.20. The outcomes of the benefits of online banking are similar to earlier studies of Ahmad Kaleem (2008). The customers gave average responses to rest of the statements of the benefits of online banking. The second part which was related to the risks associated with online banking show that the customer's fear of the chance of fraud in online banking is at the top of the list with the highest mean score of 3.19.The chance of govt access to data comes second which showed the mean score of 2.56. Rest of the statements showed low mean scores. And the results of the risks associated with online banking are a bit different from previous studies.

INTRODUCTION

History tells that technological innovations have always added up in human general and professional life. And last two centuries can easily be called as the era of technological revolution. And during the process of this modern technological era the innovation of computer has totally changed the landscape of today's modern world. Rapid technology advancements in this field have totally changed the world wide economic and business atmosphere.

Same way innovation of internet banking in the banking sector has opened a new and totally different platform for speed up communication and transactions of financial transactions for the customers (Booz et al, 1997). It is essential to introduce this latest banking tool to customers in a positive way and create awareness in customer's minds to get the most out of this new innovation for both the customers and the service providers.

Internet banking started some 20 years back and at the moment millions of people access their bank accounts online every single day and this number is increasing day by day. You can access accounts, make payments, can transfer funds online, pay bills, view your account statements, change your personal details etc online. Instead of traditional operating boundaries, in online banking financial institutions suddenly find themselves in a different kind of environment where they compete for the customer loyalty and liquidity. Starting of this new-era of online banking facility has helped customers in many ways but it has also introduced a number of risks which were never there before in any other generation both for the customers and the banks. Although internet banking has attracted hundreds of thousands of customers around the world but still the customer satisfaction/acceptance level, security issues and the future growth of the industry are still challenged. Online banking has developed at a tremendous rate and now even banks/financial institutions are competition each other in providing online services. But only those companies who will provide more value-added services will win the customer loyalty.

Some of the barriers/drawbacks of internet banking are continuing investment that banks have to do to make sure that their online system is secure. These investments are mostly done in expensive, proprietary networks and software solutions to make their server secure from hackers and viruses. Although online banking has already completed more than twenty five years but analysis of the dimensions and the direction and the degree of risk involved in this revolution are far from complete.

As every body knows that customer satisfaction is one of the basic requirements for the success of any business in any sector around the world (Welch et al., 2005, Terblanche, 2006, Perreault et al., 2006, Cohen, 2006, Athanassopoulos and lliakopoulos, 2003) The main reason to this is that high customer satisfaction in return gives higher market share and higher level of profits (Szymankski and Henard, 2001). Satisfaction levels with online banking are improving over the years.

In this study the benefits that the customers are getting from using the online banking services are evaluated and the risk they are facing by using this service as well. In past few years, the margin of profits in banking sector has increased a lot. And online has also contributed to it. Although the ratio of accepting this new technology is different in different countries but still people are accepting it almost all over the globe. One of the positive aspects of today's modern world of commercial banking sector is the formation of new deliverance channels for customer satisfaction and most recent of them is online banking (Daniel, E. 1999). Traditional way of providing services only by bank branches is not enough to meet the needs of today's customers (Bradley, L et al, 2003). Adoption of online banking is increasing day by day although the level of adoption could be different in different countries.

Online/Internet banking can be defined as an alternative to traditional banking system which allows the customers to perform almost all financial transactions e.g. balance checking, money transfer, account upgrades, bank statement printing etc on the banks secure website which otherwise can be performed only by visiting the banks branch.

History of Internet Banking in UK

Online banking services started from the early '80s in New York and in 1981. In the beginning Citibank, Chase Manhattan,Chemical and Manufacturers Hanover offered home banking services by using the videotex system but at that time videotex system didn't became popular except in France and UK where they used videotex minitel and prestel.Now we are going to discuss the history of online banknig in UK which started in 1983 and Nottingham Building Society was the first one to start this service at that time. It was based on the UK's prestel system and used a computer such as the BBC Micro or keyboard connected to the telephone system and television set. So, the customers had the facility to view their bank statements, bank transfers and also had the facility of making online bill payments. And at that time some part of it was done manually as well e.g. if any customers likes to make bank transfers or bill payments, (includeing details of the recipient)washad to be sent to the Nottingham Building Society had to be notified in written form who set the details up on the Homelink system. Usually people used it for paying their gas, electricity and telephone bills. While Stanford Federal Credit Union also joined NBS in October 1994 and started online banking services to its customers and was the first one to do this.

Types of Online Banking

Online banking is divided into three types and this division is done on the basis of functional level of online banking that is currently employed in the market.

• Informational
• Communicative
• Transactional

Informational (Websites) - This has been identified as the first level of internet banking. Typically the bank has the marketing information about the bank's products and services on a stand alone server. The risk is very low as informational systems typically have no path between the server and the bank's internal network.

Communicative/Simple transactional (Websites) - This type of internet banking allows some interaction between the bank's systems and the customer. The interaction is limited to e-mail, account inquiry, loan application or static file updates (name and address). It does not permit any funds transfers.

Advanced Transactional (Websites) - This level of internet banking allows bank customers to electronically transfer funds to/from their accounts, pay bills and conduct other banking transaction online like CABS in Zimbabwe.

Features of Online Banking

Online banking consists of many characteristics and some of them are listed below:

Transactional Features:

Features which are used to perform a financial transaction are called transactional features such as money transfer from one account to another account of either the same customer or different customers, paying bills,applying online for a credit card or for a loan or a new account etc

Non-transactional Features:

These features include online viewing or printing of account statement, checking links, cobrowsing, chat, wire transfer, sending mail to banks/financial institution administration.

Different ways of attacking Online Banking Websites

There are a number of ways used these days to directly attack either the banks websites providing the facility or their customers. But it is much easier to deceive the customers, most of the attackers try to deceive the user to steal his/her login id and password. Two of the most used methods for such kind of attacks are phishing and pharming. Other methods used to steal login information includes cross-site scripting and key logger or trojan horses. Even hackers try to attack signature based online banking method as well and they try to manipulate the software. By using this method real and genuine transactions are seen on the front page by the user to deceive him/her and faked transactions take place in the background.

A recent report by FDIC Technology Incident Report tells that around 536 cases of computer crimes related to hacking and phishing and data loss have been registerd. And if we calcute the worth of these losses it goes around $30,000 per incident . And the grand total could be up to $16-million loss within 2007. Such kind of money loss due to computer crime have already increased at a rate more than 100 percent in last 2 to 3 years. And in most of these cases the attacker cannot be identified and the targeted custormers are those who are using online services in one way or the other.

The latest method used by the hackers to attack is that a trojan horse allows the hacker to change both the destination account number and the amount of the user.

Security Measures by the Banks

In online banking increasing number of security issues day by day as compared to conventional banking is one of the major worries of banks. The most basic method used by the banks to provide security to the customers is allowing the customers to access the data by using a one time password authentication method. Most of the secure Internet shopping sites use this method for providing security to the customers. But using this method for online banking is not secure way of doing things online. Banks/financial institutions use two different security measures to fail the attacks by the hackers.

The first one is the PIN/TAN system in which users are given new passwords every time they login and do the financial transactions. And mostly these passwords are sent to the customers by post. The most appropriate way of using TANs is to generate them only when customer needs them. This is basically a two-factor authentication way and the positive aspect of adopting this method is that no additional encryption is required. The second method is also a commonly used method and this method used is Signature based in which all transactions are signed and encrypted digitally. And the digital signatures of the custoemrs are then stored either on any kind of memory storage disks or smartcards.

Countermeasures for failing such attacks

Banks and financial institutions are using several countermeasures techniques to avoid all these kinds of attacks which have been discussed in previous heading e.g. to stop attacks that are done by both phishing and pharming, digital certificates have been introduced. On the other hand, class-3 card readers are introduced to fail those attacks which target signature based online banking. While on the users end, they should use virus scanners to be on the safe side against different ways of hacking tools like phishing, pharming, Trojan horses etc. It is also been observed that when people download material from internet, many times some hacking files also enter the systems and later those files are either used directly by the hackers to steal data or those files simply start sharing and sending your data with the hackers computer. Another step taken is the multifactor authentication (MFA) process.

History of Banking

The earliest of all banks in old age were the temples of that time. This practice started around third millennium B.C. And if we think that the culture of having banks in a society only started with the invention of money, then we are wrong because they started even before this. At that time instead of money people used to deposit grain. But after sometime at a later stage, people started depositing cattles and agricultural implements. Eventually comes the deposits in the form of gold, precious stones, metals etc in the form of compressed plates were used as deposits. One of the strongest reason of using temples and palaces to keep the precious goods were that they were the safest places to store gold at that time because they were almost always full of monks or worshippers and were well built as well. On the other hand, temples were sacred places so temples give an extra protection to precious goods from robbers. Even the culture of giving loans is as old as around 18th century BC in Babylon. And most of the times those loans were given by priests/monks of that time and mostly to the businessman community of that time.

Ancient Greece also has a history of banking. Most of the transcations at that time were giving loans, deposits, exchaning the currency. And proofs have been found that rather than giving money in cash which was taken as a loan, a credit note is given to the customer in one city and the customer used to take cash in another city by showing that note. And the advantage of doing it is that it was saving the customers from getting robbed on their way from one city to another. And this technique of credit-based banking was very common in 4th century B.C.in the Mediterranean world. Egyptian people also used to use grain as an alternative of money.

By the fall of Egypt, the no. of different government based financial institutes of that time were combined into a single network of grain banks and their head office was in Alexandria from where they were monitored and the transactions of grains and other stuff from all the state granary banks were recorded. And even at that time paymets were done from one account to the other without actually moving money from one place to another. During last few decades of 3rd century B.C., an island of Delos, known for its magnificent harbor and famous temple of Apollo, became a leading and well known banking hub of that time due to the temple of Apollp and excellent harbour. Same way in Egypt, without moving cash from one place to another financial transactions used to take place by just writing a credit receipt. Ancient Rome took this art of doing financial transactions to a new level and started forming some rules and regulations and a set infrastructure for the system and formed and practiced many regulations for banks/financial institutions. Although interest charging was an old traditions but make it more structured. But further growth of Roman banks was limited because they used to do cash transactions more frequently. And even in Christinaity practice of charging interest is considered immoral, so the further development haulted at that time. And the last but not the least point to add here is that due to the fall of Roman empire banking also diminished and didn't came on screen until the start of the crusades.

Western Banking History

Modern Western banking history initiated in London with the formation of London Royal Exchange in 1565. At that time their offices where they used to sit and do financial work were called banks. There exsisted also a hierarchical order among professionals at that time. The list included bankers, city exchanges and pawn shops respectively.Before the Industrial Revoultion Amsterdam was the financial capita of the world in 1609. And during last decade of 17th century Amsterdam, London, and Hamburg were like the central banks of the world. And the famous East India Trade company was the most stable of that time.

Global Banking

In the 1970s and 1980s there was a wave of deregulation and privatization of government enterprises. The basic reason for doing so is to improve economic growth of the countries and it was private-sector at that time which was given the responsibility to participate positively in the growth and development of the country. Even the developed countries of today were facing the issues of economic growth at that time. This gave a chance to large companied to expand their business internationally. During this phase of globalization and expansion banking sector also grew tremendously. And U.S. emerged as the largest stock market in the world. And their economy and assessts grew twice the rate of the rest of the world. But they didn't enjoyed that kind of growth rate during last twenty years. And U.S. Foreign investments also play a part in this decline. And the other factor is growth of foreign financial markets. For example Japan where ratio of savings has gone up in last two decades and then the deregulation in other parts of the world is also a factor influencing U.S. growth rate.

Such growing trend of globalization and the avaliability of opportunities of economic growth abroad has totally changed the traditional banking and now many banks have shown keen interests and preference for the "universal banking" model. And these banks can perform all kinds of financial services. And Internet banking is used as a major tool to meet the ever growing and changing demands of todays modern customers and so internet banking also expanded its wings globally under this new era of global banking.

Such is a proof of global banking setup that by the end of 2000 around $10.5 trillion worth of financial activities were recorded breaking all the previous records. The top ten leading banks holding most of that market share was 80%. Among ten top ranked banks of the year the seven of them were multi-national bank who are doing business all around the globe and among them were three American and four European banks.

Benefits of Online Banking

Electronic Banking has many benefits and we are going to discuss them in detail now. First of all you can transfer funds from one account to another. And this could be done either between different accounts of the same person or vice versa. You can pay bills online,apply for a loan or a new account etc.Other features include printing of bank statement, changing personal details, contacting bank administration. Now if we go further in detail, we are going to examine more benefits of online banking. , service, technology, change, knowledge about computer usage and internet are a main Thornton and White (2001) found that there are many electronic distribution channels available for banks in US and then they compared them all and concluded that customer orientation towards convenience source of usage of different channels. And online banking is playing an important role to minimize the queues in branches which in turn increases efficiency of bank employees because if they got fewer customers in bank they can give them enough time and could solve their problems in a better way rather than looking at the long queue and getting stressed and under pressure (Thornton and White, 2001). Howcroft et al., (2002) found that the most important factors which are helpful in an increased number of usage of electronic banking are less fees and the reducing paper work and removal of the factor of human error.(Kiang et al., 2000). One more important factor which was concluded by Byers and Lederer, (2001) was that due to a rapid change in technology during last one century consumer attitudes have changed as well and people like to go for the usage of latest technology rather than bank cost a structure that determines the changes in distribution channels. Now users can do banking outside normal banking hours as well. Normally users can only do banking only between 9 a.m. to 5 p.m. And this amount of time is only 8 to 9 hours per day. Now they have got the facility of 24 hours a day and 7 days a week to do banking operations. And this is one of the most important reasons for the adoption of online banking. Banks provide customers convenient, inexpensive access to the bank 24 hours a day and seven days a week. Another point is also found in this scenario that ATM machines are contributing a lot as well in this new era of technology and these machines are performing the same kind of transactions as do a member of the staff at a bank will do. And the point to note in this sentence is that the ATM is performing these transactions at half the cost a human can do and with a four-to-one advantage in productivity. Gerrard and Cunningham (2003) found a positive correlation about the factor of convenience and online banking because you can now do all the banking transactions even from the ease of your home and you don't need to go to branch and wait in a queue to be served. Multi-functionality of this IT technology is also contributing feature to higher the customer satisfaction level which is not an easy task in a highly competitive time of today. With the availability of self-service machines or channels, banks can reduce their branch network and to some extend number of staffs as well. Because if people are being served by machines in the same way as by an employee and in return the customers are satisfied as well, so it means that these alternative channels are helping banks in improving their efficiency and reducing their branch network or the number of employees. And that number of staffs can be used in some other profitable venture by the bank (Birch and Young, 1997). And this thing can ultimately help towards achieving improved customer satisfaction and increasing the institution's efficiency level (Thornton and White, 2001). Nowadays banks are even competing over providing better and secure online services and even non-banking financial institution are involved in this race. With more usage of online system customers now can compare different prices by different suppliers easily and quickly. The Internet increases the power of the customer to make price comparisons across suppliers quickly and easily. And as a result this stabilizes the prices of different products and the customers can have a better product in reasonable price. Yakhlef (2001) found out that almost all banks are responding different to this new fast growing and adopting technology. He also found that those banks which are taking it in a positive way are achieving better communication levels with customers. This point has also been discussed that by providing financial services to them right into their home/office is strengthing the bond and trust level between cutomers and the banks. As a result banks are enjoying increased customers loyalty and satisfaction.

Nancy et al. (2001) took forward this debate in a different way and viewed that customers still like and prefer to go to branch and interact with a human to solve their banking problems rather than choosing machines to solve their problem. Because they found that there are more possibilities of asking a same question in a different way or asking many different questions at a same time. And the bank clerks are less vulnerable to machines with a quick level of response to all possible questions. This increases the probability of offering customer a new product or a best suitable product to customer and at the end it leaves a good image on the customer and enhances customer loyalty. We should note another point over here that level of usage and popularity of online banking is not the same in different countries around the world and the level of response in many developing countries around the world is less than the level of response in developed countries. There are many factors which play role in such kind of response. It includes ignorance, illiteracy, insufficient security measures by the banks and the government for online banking, preference for banking in branches rather than on internet etc. For example Polatoglu and Ekin (2001) studied about online usage in Turkey and found the same reasons as described above for the low level of usage of online banking. They found that ignorance to the usage of email system and preference of doing everyday banking at bank branches are some of the main reasons of low level of adoption of online banking in Turkey. So as a result e-banking is not that famous and in use in Turkey.

Risks Associated with Electronic Banking

Now it is time to discuss the risk factor included in the usage of electronic banking. Now we are going to discuss that although customers are getting a lot of benefits by using online banking services but by using online services they are exposing them to a number of risks that should be considered before using online banking on regular basis. One of the most basic and first point in this debate is that although we accept that online banking is providing a lot of opportunities for the banks in terms of efficiency and time and money saving and customer loyalty but it also limits this whole system and its future and current growth due to security issues, complexity of the system and technical problems involved (Sathye, 1999: Mols, 1999). Now these issues can be viewed in different ways. Some people will view them as an issue related to the level of trust on one's bank. Even Hewer and Howcroft (1999) in their studies defined these risk issues as level of trust to a measure the amount of risk. A number of previous studies have concluded that level of trust in case of electronic banking and perceived risks have a positive impact on commitment and customer loyalty and trust which ultimately leads towards overall satisfaction level of the customer about electronic banking. In this scenario, we can say that reputation of the service provider also affects the customer's level of trust on the financial institution/bank. Doney and Cannon (1997) defined reputation as the safety of customers money and privacy. Because if the customers are not sure of the honesty or loyalty of their service provider they will simply quit that service provider and move to some other service provider which they think is better and more honest and concerned about the security of their financial transactions. Level of trust is the first and the most basic step of doing any kind of business with any firm/institution or service provider. Tyler and Stanley (1999) also argued on the same thing that by showing commitment, honesty and cooperation between them and the customers, they can win customer loyalty. In some cases it is found that customers' do have complains about the longer logon times consumed during online banking transactions rather than using any other medium for communication e.g. phone call etc. Min and Galle (1999) found one of the common factor in their survey which is the disruption of information access to be one of the most common factor which draws the customers away from using Internet channels for commerce.

Similar results have been found by Liao and Cheung (2002) in their research and they also suggested that customers expect the online system to be always accurate, friendly, fully secure, level of service should be good i.e. response time. If these factors are there then we can say that online banking can grow and it does hold a future otherwise the future is a bit doubtful and some positive changes are needed in the online system. Confidentiality or privacy of data is also one the major factors to be considered in adoption of online banking because a large number of customers feel unsecured about sharing their personal information by this medium and feel that their personal information could be used in a way to exploit them or to share with someone without have the right to share their personal information. (Gerrard and Cunningham, 2003). In the same scenario a research was conducted in UK by White and Nteli (2004) about the number of internet users n the country and the number of online banking users in the country. And the major factor which came up at the end of the study was that people in UK are vary of sharing their personal information on Internet and they are still not satisfied about the laws by the government about internet banking and the frauds and hacking. This is an example of unfair or incomplete and unprotected system available to be used by everybody from a genuine customer to a hacker. In some cases people are not sure that in case of a dispute whether electronic documents and records are enough to prove their point or they ar not acceptable. And if a dispute arises in case of a fraud then what is going to the result of it, whether they will have enough material or not to prove their point. Other similar kind of risks include loss of job for many employees because of more frequent use of machines for financial transactions rather than going to bank branch. They it affects the social part of the society as well. because if people are doing all such things at home then they will not go out and contact with other people will reduce which will reduce the opportunities for people to socialize and interact with other people and to some extent can add up to a less active society (Black at al., 2001).

LITERATURE REVIEW

How Banks perceive Online banking in developing countries

Online banking provides substitutes of fast services of banking to a large number of customers. Online banking services are fast becoming popular both among academics and practitioner. Rapid advancement in banking industry has brought a lot of amendments in the sector. Public banks dominated the financial markets before 1990. After 1990 the privatization of banking sector started. Many amendments and improvements came after the privatization of banking sector. Even the electronic banking started after the privatization of the sector. Out of many technological wonders electronic banking is one of the wonders. Quite a lot of online services are being provided by different banks in Pakistan i.e. checking account statement, account balance, checking current balance, transfer of funds, credit cards payments, direct payments, utility bills payments, cheque book requests, stop payments requests, demand draft requests, new fixed deposit requests, statement download, other information and guidelines download.

This study describes the risks and benefits of online banking in Pakistan. It minimizes inconvenience, reduces transaction cost and saves time. It also reduces the risk of cash carrying. But it leads to data access to public which leads to data insecurity and enhances the chances of fraud and embezzlement. Electronic banking involves lower fee and less paper work and human error. Online banking provides customers convenient and inexpensive 24 hours non-stop banking services. Online banking reduces the queues in the banks by providing enhanced distribution channels. Less space and bank employees are used for online banking. In this way these assets can be used in some other lucrative businesses. Customers can easily compare the prices of services in the case of electronic banking so they can make an inexpensive choice. The banks which have switched to online banking have achieved better communication and connectivity with customers. Banks can enjoy more customer loyalty and customer satisfaction by having online banking.

On the other hand the online banking facilities cannot be made wider due to security concerns, technological problems and complexity. Customers find online form filling difficult as they are worried about making the mistakes. Moreover, they find it difficult to wait for log on times as compare to making a phone call. Disruption of information access is another problem that online banking customers find. They are hesitant to use electronic banking because of disruption of information. Security is one of the biggest problems in electronic banking. Customers are afraid that others can view their financial information which can be dangerous. Lack of set rules and laws for governing electronic banking is another risk involved in electronic banking. Since there are no set laws therefore, it can lead to fraudulent. Another disadvantage of online banking is that many people lose jobs and lack of job opportunities prevails in the society. Electronic banking minimizes the inconvenience and reduces the transaction cost and saves times appeared with highest mean scores in the study. Electronic banking has the risk of getting accessed by government and also electronic banking has the chance of fraud etc showed the highest mean scores in the context of risks involved in the electronic banking. Ahmad Kaleem, (2008).

Internet Banking Customer satisfaction and online service attributes:

This study was done to find out whether online banking increases customer satisfaction or not and what are the online service attributes which create more customer satisfaction through onlinet banking and what are the characteristics of more satisfied online banking customers. The results suggest that banks are taking internet banking very seriously and customers are quite satisfied with the online services of banks which is being provided to customers. The study also showed that banks should provide a range of online services if they want to win customer loyalty and trust and satisfaction. Customers should also be provided updated data in order to provide them good online banking services. Hernan E Riquelme, (2009).

E-Business in Pakistan: Opportunities and Threats

Nowadays business is being conducted online rather than conventionally. From management perspectives, there are many technical and non technical problems in business. The last two decades have shown that e-business have improved a lot. E-business has revolutionized the conventional means of doing businesses. It has also opened new doors for those who want to experiment and invest into a new business. It saves time and cost of conventional transaction of business. It minimizes inconvenience and reduces the risk of carrying cash. Although few developing countries are still using the conventional modes of business yet many organizations have switched to internet business. Organizations are using internet technological tools for doing their business. Many businesses are making it a competitive edge in order to earn more profit and many businesses have been successful in this regard. It is not easy to implement e-business because of financial resources and lacks of IT know how. Developing countries have many financial problems and there are very few customers who can transact online. There are only few online businesses which are making profit. IT is shrinking the borders and expanding the business. So besides opportunities there are many threats which lead to internet business.

E Payments: Problems and Prospects

The online businesses and internet is growing rapidly due to which the electronic mode of payment is increasing speedily. Now there are many technological supports for electronic payment. Electronic payment reduces the cost of exchanging goods and services. But there are also some threats of electronic payments. Since the data is available online so others can easily access it. Hacking has become very common these days. On the other hand there are some other kinds of frauds and embezzlement. Since there is no human interaction in electronic payment so the chances of frauds are higher. It takes time to get familiar with new IT systems. So it is difficult for lay men without training to handle it. The other problem is to expand the telecommunication services because online business involves at least on phone line and the facility of internet. So the online user should be very vigilant before using it. Whenever an updating to increase security levels is available, it should be immediately availed. Highly confidential information should not be revealed to anyone except the owner. Customers should always take expert opinion of those who have already experienced the process. Trainings, seminars and workshops should be attended to become computer literate and internet literate. Customers should also comply with terms and conditions issued. Incase of any theft the customer should notify the issuer as soon as possible and protect identity codes from public's view. They should also update personal information once in every two months.

Adoption and Use of Internet Banking in Zimbabwe

Usage of Internet and internet based technologies are becoming widely accepted all around the globe but this ratio is still not satisfactory or not up to the mark in some countries of the world.

This study was done to find out the level of adoption and the degree of challenges faced by commercial banks in Zimbabwe by adopting internet banking. The results at the end of the research were not healthy enough in case of customer usage of internet banking although a large number of banks in Zimbabwe are providing this latest technology. Fifty percent (50%) of the respondents indicated that they have been strongly affected by lack of expertise and an equal number indicated that they did not view lack of expertise as a challenge in their bid to adopt and use this new banking channel. User acceptance and lack of legislation were ranked last.

Although banks are facing a number of challenges in going for this technology like the compatibility with existing legacy system, high cost of implementing the system and the last but not the least is high level of security issues but still the response level in usage of this technology in Zimbabwe is not satisfactory enough. The researcher has also suggested that if banks want the customers to go for the internet banking, then they have to plan a strategy to promote the usage of this technology in general public. They have to work out ways to promote awareness among customers of this technology and have to highlight the benefits of this technology. And the government and central bank of Zimbabwe should also join these commercial banks and have to play their role in promoting this technology across the country.

Customers Perception of Security Indicators in Online Banking Sites in Nigeria

This study was revealed in Nigeria to find out the customers perception of security indicators. Usage of Internet and internet based technologies are becoming widely accepted all around the globe but it comes with a high cost as well in form of hacking and id stealing by the hackers.

With the arrival and adoption of online banking come the criminals who try to get advantage of the vulnerability of the system and use it in evil way to steal user's id and password. Basically what hackers do is they trick the customers through either fake website or by fake e-mails that looks like a real one from your bank/financial institution.

Banks and financial institutions are using several countermeasures techniques to avoid all these kinds of attacks and to alert the users of the danger and one of such methods is usage of Security Indicators (SI).

The total number of banks selected to conduct this survey were thirteen. Users were asked to just visit the online sites of those banks which are selected for the survey and do some routine online. And in the second stage they filled survey questionnaires which were designed to find out about the users perception of SI related to their online experiences. This research further explains that there are two types of SI tools commonly in use to help customers remain safe of such sites. One is .Passive and the other one is Active SI. Passive SI works in the form of text alerts, changing colors etc but it doesn't totally stops the user from carrying out his/her work while Active SI system is more aggressive in such a way its forces the user to notice its warning by totally stopping you from what you are doing and then making you read and realize that you are in danger. already previous researches have shown that passive SI is failing to alert users of the danger and sometimes these SI do mistake in judging a spoof site or a genuine site and it creates confusion for the customer.At the end it is revealed that the effectiveness of SI in Internet banking sites to alert the customers of spoofing is not satisfactory. Around 27% participants failed to understand the full meaning of the SI while the SI system failed to grab the attention of some of the users and even having active SI system18.3% customers still went ahead to submit their personal information.. Another important point to note here is that in case of Passive SI system, the time taken by the SI to generate an alert was about 8 seconds which is not a healthy sign because if the user is ignorant of the situation he/she can easily dismiss that warning sign. On the other hand results from the Active SI system look promising and positive because among all the selected banks in the survey 9 of them successfully interrupted the users activities with a warning message. And then once users have read the warning sign then they were given a choice of either to leave or to proceed with their current transactions. This method is more successful than the other one because the users current tasks were interrupted.

One more point that should be noted here is that recovery of credit loss due to such activity is also a difficult and long process. The researcher found that SI is not enough to protect customers against hacking and hackers because they are not alerting users the way they should from exposing their personal information to hacking sites. This result could be used by senior management of banks to develop more effective security strategies for better protection of their customers and for the bright future of electronic banking in Nigeria. These are the main reasons of slow growth of internet banking in this country. Ignorance of the general public of the system is also contributing heavily and effecting negatively to the growth of internet banking in Nigeria.

Changing Face of Banks and the Evaluation of Internet Banking in Turkey

The purpose of this study was to examine the usage of internet in Turkey to investigate and evaluate online banking services in Turkey with the help of statistics avaliable from the Bank Association of Turkey over the period 2005 and 2008. Another main reason to conduct this research was to measure and highlight the positive growth of internet banking in Turkey between the years 2005 and 2008.And the statistics provided by the researcher do match the claim of the researcher the usage of internet and the online services in form of online banking and shopping has gone up dramatically in last few as compared to the data before that.

Previous work in this field tells that security of the sites, proper communication with customers and understanding their point of view,flexibility to adopt change and innovation of the organization, good cutomer service etc are some of the main factors participating in the success of online banking. On the other hand, the availability of 24 hrs access to online account is one of the main and leading motivational factor for the customers to use online banking services.

In today's modern era banks are using online banking as a powerful tool to attract customers. The financial world of today's modern age which moves around banks has totally changed over last few decades.Rapid advancement in banking industry has brought a lot of amendments in the sector. Public banks dominated the financial markets before 1990. After 1990 the privatization of banking sector started. Deregulation has brought positive aspects for both banks and the customers. Many amendments and improvements came after the privatization of banking sector. Even the electronic banking started after the privatization of the sector. Out of many technological wonders electronic banking is one of the wonders. The findings of this study reveal this fact that usage of online services in Turkey among young population of the country is growing at a higher rate.

As we all know that currently all the major economies of the world are going through a period of recession but the surprising thing that the researcher of this project has mentioned is that the banking industry in Turkey is not going through this phase rather it is continuing to grow according to the statistics in 2008 and foreign investment has also gone up.

Recent economic reforms in Turkey have formed an attractive and profitable market for foreign investors. This resulted in growth of the economy and also it forced the existing banks/financial n banks to restructure and organize their operations.

In short there are three types of banks operating in Turkey. First comes the commercial or deposit banks then the one which are non-deposit or development and investment banks and at the end comes the participation banks which are based upon interest-free banking (Profit/Loss Sharing).

Until at the end of 2008, the total no. of banks in Turkey was 49. out of 49, 32 commercial banks, 13 indulged in non-deposit banks and remaining 4 were participating banks.

By the end of 2008, total assets of banking sector were $ 481.5 billion USD. And the total loans amounted $ 241.5 billion USD. While total figure of deposit reached $ 298.7 billion USD and all this mounted the net profit of that period to around $ 8.74 billion USD.

The number of users of internet are increasing tremendously and at a very high pace.If we look at the latest statistics provided by the internet world stats, we come to know that there are 1.6 billion internet users worldwide and this data published was up to 2008. And in 2009 this number has even gone more up.. Hence, statistics say that internet is increasingly changing the global marketplace and increasing the opportunities for global business. Like the rest of the world Internet users are increasing rapidly in Turkey as well. And this factor has also contributed heavily in the fast development of online banking sector in Turkey.According to data published by Turkish Statistical Institute (TURKSTAT) the percentage of internet users in Turkey increased by 131,2% and 20,7% as compared to April-June 2005 and 2007 respectively. And this resulted in an increase in the number of online customers of the banks.

According to the Banks Association of Turkey's report (BAT, 2008) which published data about 25 banks in Turkey who offer internet banking , the number of active retail clients was 4,613,670 in the last quarter of 2008. And statistics tell that number increased by 1,637,378 and 818,043 as compared to December 2006 and 2007, respectively.

On the other hand, the total number of registered commercial clients that logged in at least once during the last quarter of 2008 was 555,459.

As a result the number of financial transations performed by online banking exceeded as well and reached 223,130 million in 2008 (excluding investment transactions)

The rate of the total number of financial transactions also increased by at a higher value breaking all the previous recorded figures. It increased 89,3 percent reaching a value of TRY 569,871 millions in 2008. (excluding investment transactions) as compared to 2005, 47,8 percent as compared to 2006 and 16,3 percent as compared to 2007.

Although the increase in the number of financial transactions being done by online banking increased in 2007 and 2008 but the total number of investment transactions executed by online banking decreased as compared to 2005.2006 and 2007

The total number of investment transactions executed via internet banking services was 34,257 million in 2008 which was less than the figure seen in previous years. The total volume of investment transactions executed via internet banking services was TRY 165,915 million in 2008. The upwards boom continued in the year 2008 in the total volume of investment transactions executed via internet banking services. The total volume of investment transactions increased by TRY 36,237 million as compared to in the year 2005, 2006 and 2007.Foreign currency transactions in 2008 were the largest in total volume of transactions with TRY 54,137 million (32,63%), followed by investment funds with TRY 54,094 million (32,60%), other investment transactions (time deposit accounts, repurchasing agreements, gold transactions, bond and bills) with TRY 42,272 million (25,48%) and share certificate transactions with TRY 15,419 million (9,29%).

The Citibank Affair: A Purely Russian Crime?

A fairly large article ("Purely Russian Crime..."

NRS, Sept. 15, 1995, pp. 13-14) was written by Vladimir Strizhevsky

This article is based on a high profile money laundering and theft case.

Nahum Goldmann has been employed as a manager, scientist and lecturer in leading industrial high-tech firms and academia. Mr. Goldmann has published several critically acclaimed books that deal with knowledge transfer issues.

First publication of this crime took place in NY by a Novoye Russkoe Slovo (NRS) newspaper in September 1995. This is the only newspaper of its kind who publishes its material in Russian language outside the Russia.

The article was based on the original investigative materials submitted by several contributors from Moscow, St. Petersburg,NY, London, Brussels and many other financial capitals of the world.

But this story is really very fascinating, interesting, some what shocking as well and of course knowledgeable as well specially for a student or an expert on todays modern system of online banking and e-commerce.

The first chapter of this story introduces a Russian Vladimir Levin who did number of electronic transfers from several Citibank's subsidiaries in Argentina, Indonesia to a number of banks/financial institutions in San Francisco, Tel-Aviv, Amsterdam, Germany and Finland. And this came on screen after intense investigation by a number of law enforcement agencies around the world.

But the first step towards unfolding this Russian was taken when in August 1994 a Georgian national Alexei Lachmanov was arrested by Israeli police when he wanted to withdraw around U$$ 1M in Tel-Aviv. And he was having fake Greek passport with fake name at that time. And the money was transferred to five Israeli banks from Invest -capital. But the FBI informed the Israeli authorities of the fraud on time because they were given a hint of a suspicious activity going on by the Citibank.

And the Citibank informed them that these transfers have been done with the illegal use of Invest-capital's own secret codes.

So once again discussing about Vladimir Levin. He was a 31 year old genius and a graduate degree holder in Applied Mathematics and had excellent understating of the computer system. His interest developed in hacking when he given offer to develop a programme for a trading business of a man. And from there on he started discussing the ideas of breaking a secure bank network.

And this man succeeded not only in breaking Citibank's own electronic cash-management hub in NY but also the major break through was when he cracked the electronic defense of several SWIFT's branch offices in the some of the developing countries of the world.

Basically SWIFT is Secretive Belgium-based Electronic Telecommunication Consortia of World-leading banks. But the spokesman from the Citibank rejected such claims from newspapers rather he said that they already knew it and they allowed him to do it to track him down and to reveal his identity. But this answer doesn't seem satisfying enough keeping in mind the scale of electronic fraud that took place. because this fraud included a large amount of cash, network large enough to cover continents and the scale of crime covering many nations under it and huge losses for banks in term of reputation and the money.

Another point which is also very important to mention here is that Levin was supported by around 30 people. And most of them were expert in computer hacking and information stealing from secured websites. Arrests had been made in many parts of the world including U.S., Russia, Israel, Netherlands etc. And this a bone chilling story for a normal online banking user who knows nothing about this criminal stuff and who has no motives or no expertise of doing such kind of large scale distortion. And the same year Mr.Levin himself was also arrested in September 1995 in a UK airport. And after this incident Citibank upgraded its electronic payment system and made it more secure but still only time can tell whetherr it helped them or not.

An Experimental Investigation of Online Banking Adoption in China

In this paper, we investigate the influence of perceived ease of use, rather than both perceived ease of use and perceived usefulness. China is still a developing country, with fast economic growth. China has become the number one country of Internet users, the US being number 2. However, using the Internet for e-commerce and online banking in China is still behind the US and the European Union. We assume that the perceived ease of use is still an important factor influencing users' adoption of online banking.

Hypothesis 1: the easier the use of the online banking website, the more likely the users will use this service

The functionality of online banking is the same as a local bank, especially the financial services. Since online banking has the same functionality of local banks, the perceived usefulness might not be as important a factor for people to use online banking.

This research was done in China and the main objectives of the research were to find out the acceptance level of online banking in China. To get the results the researcher tried to find out the customers perception of online banking based on the perceived ease of use of online sites, level of security and the privacy policy provided by the online banking websites.

We find that both perceived ease of use and privacy policy have a significant impact on user's adoption of online banking.

In this study, we also investigate the relative importance of perceived ease of use, privacy, and security. Perceived ease of use is of less importance than privacy and security. Security is the most important factor influencing user's adoption. A discussion of the implications of these results and limitations are provided at the end. Our experimental findings show that both perceived ease of use and privacy policy have a significant impact on the acceptance of online banking while there is no interaction between them. Online shopping is a significant covariate, which means that it is highly correlated with online banking adoption. Furthermore, security concern is identified as the most important consideration about using online banking, even though privacy policy also impacts people' use.

INTRODUCTION

This new age of IT has opened a new window for the banks/financial institutions to expand the scale of their financial services and enable them to use internet as a powerful medium to attract and facilitate their customers by offering online financial services in the form of online banking.well.These days banks are using internet as an alternative to traditional ways of banking.

And online banking is considered as the most advance and powerful way of reducing the cost of providing financial services and to maintain and further enhance and expand services for the consumers.

There is been rapid growth observed in the number of online users inChina but most of them are organizational users and the number of individual users of online banking in China is still very low. And according to latest statistics there are around 40 million users of online banking in China But surprising thing to explain here is that the ratio of online banking is still very less although the development of E-commerce is expanding in china.

Security is still the biggest obstacle of the acceptance of online banking (Laforet, and Li, 2005). A joint survey in China polled over six thousand people, with nearly 90% showing severe security concerns about online banking. According to the latest report, online payment has become the biggest obstacle for the penetration of E-commerce in China. As the facilitator of online payment, online banking is of great importance to the further development of Chinese E-commerce. Understanding how people perceive online banking may help policy maker and managers to facilitate the prosperity of the E-commerce.

Privacy and Security Policy

Trust is the most important and preferable factor in the adoption of online banking any where around the world. And privacy of the users data and the security of the personal data of the users are the two key factors required to be fulfilled in the case of trust and the adoption of online banking.

In the literature, privacy and security have been mixed together in a large body of research. There is very little research investigating the different impact of privacy and security partly due to the high correlation between them (Belanger, et al. 2002).

In this study, privacy is measured by the presence or absence of specific privacy policy whether the online banking offers its own privacy policy or not. This has particular meanings to China since there are no specific laws and rules protecting consumers' online privacy yet. Privacy commitment of online product and services merchants may serve as assuring consumers' suspicions. Posting the websites' privacy policy has been justified as a good business practice (Culnan, 1999). In this study, the presence or absence of specific privacy policy is used to measure the different levels of online banking websites' commitment.

Hypothesis 2: the absence (presence) of privacy policy of online banking websites leads to less (more) adoption of the online banking.

Previous research has shown that privacy and security concerns are always mixed together. In this study, privacy is identified as an important factor influencing the acceptance of online banking.

The impact of security is not investigated in this study. There are two reasons. First, even though there is a mix use of security and privacy in the extant literature, there are still some studies that provide empirical support to the dominant impact of security in influencing the Internet-related services including online shopping and banking (Belanger et al, 2002; Laforet and Li, 2005; Frank, 2006; China.Com, 2007). The second consideration is that Chinese online banking and online shopping are still in their early stages.

Security is still the dominant factor influencing peoples' acceptance of online banking in China (Laforet and Li, 2005). In this sense, other factors' effects may be totally covered due to the dominance of the security concern and not discernible for us. However, we still investigate how people perceive the relative importance of perceived ease of use, privacy, and security in the debriefing part of the experiment, which enables us to justify our current hypothesis that security is the most important factor influencing users' behavior intention to use online banking.

Hypothesis 3: security is the most important factor when considering using online banking.

RESEARCH METHOD

Participants were one hundred and ten undergraduate students in a Chinese university and all of them are of ethnic Chinese

RESULTS

Therefore, a user' adoption of online banking is influenced by their online shopping experience. What's more interesting is the significant level of perceived ease of use. The impact of perceived ease of use becomes statistically significant after adding covariate online shopping experience (p-value change from 0.134 to 0.05). Without taking into account the covariate online shopping experience, we would have concluded that perceived ease of use had no effect on the likelihood to use online banking.

Hypothesis 1 predicts that the perceived ease of use has a positive impact on the acceptance of online banking. Perceived ease of use does have a significant main effect on the acceptance of the online banking website.

Hypothesis 2 predicts that the presence (absence) of specific privacy policy has a positive (negative) impact on the acceptance of online banking. Therefore, we can conclude that the privacy policy has the main effect on the acceptance of online banking.

The interaction between perceived ease of use and privacy policy is not statistically significant meaning there is no statistically significant interaction between them. This result makes practical sense since these two independent variables capture totally different concerns about users' perception.

Debriefing Analysis

The results show that security is the most important concern of users, followed by privacy, and then perceived ease of use. These responses demonstrate that participants are really more concerned about security than any other factors. It justified our differentiation of privacy from security. All one sample t test results show that perceived ease of use, privacy, and security have different mean values from zero, which means all of these three factors are important to them when using online banking.

DISCUSSION AND CONCLUSION

By providing a specific privacy policy, users' behavioral intention to use the online banking website changes dramatically. This raised the policy concern for online privacy policy makers. By using experimental design, the study distinguished the privacy and security and demonstrated both factors playing an important role in the acceptance of online banking. Security is still the biggest concern for users, which is consistent with previous empirical results (Laforet and Li, 2005). The findings justified that there is an urgent need for a privacy and security policy to protect consumers' personal and financial information

For e-commerce merchants, they can attract more consumers by providing a specific privacy policy.

Then, perceived ease of use is identified as a main factor influencing users' adoption. From the results, it supports that online shopping is highly correlated with online banking adoption. In this sense, online banking and online shopping as an integrated part of e-commerce should be paid more attention

More resources and efforts should be invested to facilitate the development of e-commerce.

Although these findings are helpful to understand the acceptance of online banking, several limitations should be addressed in future research. First, no real banking website was provided in this study.

The second limitation is about sampling. The sampling of this study was limited to students in a university. Different results may be achieved when respondents are more diversified, especially considering the familiarity of computer and Internet operations.

This study addressed the privacy policy by absence or presence. More research can be done by addressing different privacy policy levels and their impact on users' acceptance. Once the security and privacy concerns are relieved, the users will be growing exponentially. The direction of research may shift to trust, which is more complicated and doesn't just include security and privacy concerns.

The Quality of Internet Banking Service Encounter in Jordan

The purpose of this study is to identify the quality of internet banking service encounter of the retail banks in Jordan, and to identify the quality dimensions that should be improved or sustained, to achieve these purposes the banks' web sites were evaluated by using the web site quantitative evaluation method (QEM), the evaluation of the banks' web sites was conducted in March 2008 for sixteen retail banks in Jordan, the results indicated that; the banks in Jordan have significant positive quality of the internet banking service encounter, further the banks' web sites are rich in their content, and significant in the navigation, but the speed of home page down load and web site accessibility should be developed in the future.

INTRODUCTION

The adopting of internet banking has been increased dramatically during the last few years by the retail banks in Jordan; the number of banks adopting the internet banking in 2003 was two (Awamleh, 2003), but in 2008 the number increased to be sixteen as a response for the changes of customers' needs (Siam, 2006), accordingly the banks in Jordan should focus on providing a better service encounter's quality to their customer as a result of the impact of encounter's quality on the customers' retention (Wakefield, 1996; and Reimer and Kuehn, 2005). Despite the recent adoption of internet banking in Jordan, some banks has a competitive position in the middle east and Africa; according to Trajhova (2005), Jordan Kuwait Bank was one of the best consumer internet banking provider in the Middle East and Africa, this bank was the best in bill payment, also as reported by Keeler (2007), Standard and Chartered in Jordan was the best in corporate and institutional internet banking in 2007.

Accordingly the reality has been changed since the early contribution of Awamleh (2003), the published facts should be updated to reflect the changes, moreover the retail banks should have up to date facts about the effectiveness of its electronic applications as internet banking, so this study aims to answer the following two questions:

• To what extent the internet banking service encounters quality of retail banks in Jordan is significant positive?
• What are the quality dimensions should be maintained and improved by retail banks in Jordan?

LITERATURE REVIEW

The early adoption of internet banking in Jordan was emerged in 2000 by two local banks; Arab bank, and Jordan Kuwait Bank (Siam, 2006); during the period of 2001-2003 the banks in Jordan not fully utilized the concept of web banking in comparison to developed international markets as US.

During this period as surveyed by Awamleh et al. (2003); limited number of banks in Jordan conduct the transactions online, only two banks offered a limited number of services through their web, no Jordanian bank offers online opening account service or on line investment application service, the web site was used as informational vehicle mainly; detailed institutional information, promotional information, branch locations and detailed information about the broad of directors, contact details, and information on special events were presented in the web sites. These limited applications of internet banking in this period reflects the limitation of adopting internet banking in the Middle East; according to Gurn et al. (2003) the internet banking in the Middle East in 2003 was still in its infancy stage where internet usage is limited.

In 2001 only 18 of 100 top banks in the Middle East had online transactional capabilities as reported by Southwell (2001). However the banks in Middle East in general and Jordan in particular directed during the last few years toward more adopting of new technologies and expand the usage of internet banking as a response for customer needs; according to Southwell (2001) 20% of customers in the Middle Easy will leave their banks if they will not move to online banking. Furthermore according to recent survey of internet banking in Jordan conducted by Siam (2006); the banks desire to adopt internet to achieve a competitive position and as a response to the changes of customers' needs toward low cost and more fast transactions, also as reported by Arab Advisors (2007) the banks in Jordan directed toward the adoption of high technologies in order to push cost more on the front of customers.

The adoption of internet banking in Jordan has been increased dramatically during the last few years, the number of banks adopting internet banking increased from two banks in 2000 to fourteen banks in 2008 out of 23 banks working in Jordan; the kind of players of internet banking in Jordan is clicks-and-mortar model. Despite this recent adoption of internet banking in Jordan, some banks has a competitive position in the middle east and Africa; according to Trajhova (2005), Jordan Kuwait Bank was one of the best consumer internet banking provider in the Middle East and Africa, this bank was the best in bill payment, also as reported by Keeler (2007), Standard and Chartered in Jordan was the best in corporate and institutional internet banking in 2007.

Accordingly as a result of the development of internet banking adoption by retail banks in Jordan, further insight about the quality of service encounter or the web sites is very important for the researchers and practitioners alike.

THE RESEARCH METHODOLOGY AND DESIGN

The methodology employs in this paper is the quantitative descriptive survey methodology, the same as proposed by Evans and King (1999), Olisna et al. (1999), Mateos et al. (2001) and Miranda et al. (2006), so the reliability of data will be improved.

The Sample:

The list of population is identified by the Jordan Banks Society's Directory (2008), this directory is web oriented which allowed the researcher to access the banks web sites, the number of retail banks in Jordan adopting internet banking are 16, which are included in the research sample.

Data Collection Methods and Techniques:

A total of 16 Jordan banks' websites were observed directly by the researcher during March 2008, and rated according to websites indices. The websites were evaluated by using the web site quantitative evaluation method (QEM), this method was employed by some researchers as Evans and King (1999), Olisna et al. (1999), Mateos et al. (2001) and Miranda et al. (2006), according to Evans and King (1999) a web assessment tool has five main components: categories, factors, weights, ratings and total score.

THE RESULTS AND DISCUSSION

The average of WAI (web assessment indices) of retail banks in Jordan is 71.69 and significance which indicates that the quality of internet banking service encounter is significant positive; the leader banks in the quality of internet service encounter are Jordan Ahli bank and Arab Bank, and the laggard bank is National Bank of Kuwait, so the laggard banks in Jordan can benefit from the experience of leaders' banks.

Moreover as presented in the table (3); the banks websites are rich in informational content more than other dimensions, the second dimension is the communication and the third is the transactional, all the sixteen banks provide online account and pay cards service, the next services provided is fund transfer, the frequency is 15 out of sixteen bank, followed by bills payment, the frequency is bills payment, the frequency is 12 out of 16, but no banks provide tax payments, these results indicated to the advancements of the content of banks web sites in comparison to the study of Awamleh (2003).

CONCLUSION

This study was conducted for the purpose to identify the quality of internet banking service encounter of the retail banks in Jordan, and to identify the quality dimensions should be sustained or improved; the results show that, the quality of internet banking service encounter is significant positive, the most significant quality dimensions are Navigability and content, the banks web sites are rich in the informational content more than other dimensions, the second dimension is the communication and the third is the transactional, these results indicated to the advancements of the content of banks web sites in comparison to the study of Awamleh (2003), also the speed and navigation dimensions should be developed in future by decrease the size of home page, increase the number of internal and external links attached with the web sites, further increase the compliance with the ranks requirements of the Google search engine.

The Effect of Perceived Risk on the Intention to Use E-commerce: The Case of Algeria

Despite the recent economic downtown in the Internet and ICT sectors, legitimate concerns regarding privacy and trust remain obstacles to growth and important issues to both individuals and organizations. Studies on the adoption of business-to-consumer e-commerce have not simultaneously considered trust and risk as important determinants of adoption behavior. The conceptual model of this study leads us to believe that system risks of e-commerce are the major determinants of the adoption behavior.

Based on technology acceptance model (TAM), this study aims to investigate the effect of perceived system risk on the behavioral intention of tourism organizations to use e-commerce. This research is expected to provide both theoretical explanations and empirical validation on the adoption of e-commerce, and offer clear explanation and recommendations for business organizations as well as e-commerce systems providers, regarding the adoption of e-commerce and the risk and security issues.

INTRODUCTION

Despite the recent economic downtown in the Internet and ICT sectors, e-commerce as an information system is expected to continue growing, and corporate websites will remain an important communication channel.

However, the main obstacle in the e-commerce applications is the security issue. It is not only major concern among Algerian consumers but of users worldwide. Legitimate concerns regarding privacy and trust remain a barrier to growth to both individuals and organizations. To better take advantage and to be prepared for this electronic phenomenon, organizations need to identify and understand how far perceived system risk may impact executive managers' decisions to engage in web-based e-commerce applications. Recently, the importance of trust has been discussed in both the academic and practitioner press.

The focus of this research is tourism organizations that intend to provide online transaction in related to their products and services over the internet, an area of business-to-consumer. Further, trust in IT has not been addressed to a great extent in the context of e-commerce and its applications within the organizations. Based on technology acceptance model (TAM), this study aims to investigate the effect of perceived system risk on the behavioral intention of tourism organizations to use e-commerce. This research is expected to provide both theoretical explanations and empirical validation and evaluation of role of system risk in influencing the acceptance of e-commerce in the organization.

RISK AND UNCERTAINTY IN THE ELCETRONIC MARKETPLACE

Electronic commerce is a new form of online exchange in which most transactions occur among entities that have never met. As in traditional exchanges, trust has been considered crucial in the online transaction process perhaps more so given the impersonal nature of the online environment (Brynjolfsson and Smith, 2000). The lean nature of the electronic environment relative to the traditional face-to-face market leads to transaction risks rooted in uncertainty about the identity of online trading parties or product quality. Online trading parties can easily remain anonymous or change their identities. For example, in an auction market where numerous individuals participate in transactions, it is very difficult to bind one identity to one trader. Most auction sites identify sellers or bidders by e-mail addresses, which can be easily obtained for free from multiple sources. Without proper security measures (e.g., seller authentication), it is very easy for a dishonest seller to masquerade as an honest one, luring an unsuspecting buyer into a fraudulent transaction (Neumann, 1997).

Uncertainty about product quality can also be a problem for buyers in the online environment. In a traditional business setting, people get to know the quality of products by "kicking the tires". But when bidders view a product listing at an online auction site, for example, they may not have easy access to information regarding the true quality of the product and therefore may be unable to judge product quality prior to purchase (Fung and Lee, 1999). The difference between the information buyers and sellers possess is referred to as information asymmetry. Buyers in online marketplaces have to rely on electronic information without having the ability to physically inspect the product; hence, they are vulnerable to additional risks because of potentially incomplete or distorted information provided by sellers (Lee, 1998).

While trust is a catalyst in many buyer-seller transactions, it can provide buyers with high expectations of satisfying exchange relationships (Hawes et al, 1989). Trust is especially critical when two situational factors are present in a transaction: uncertainty (risk) and incomplete product information (Swan and Nolan, 1989). Pavlou (2002) refers to perceived system risk as the overall amount of uncertainty perceived by an organization in a particular purchase situation. The Perceived Risk associated with online transactions may reduce perceptions of behavioral and environmental control, and this lack of control is likely to negatively influence e-commerce usage intentions (Pavlou, 2003).

RESEARCH MODEL AND HYPOTHESES

E-commerce brings enormous opportunities for both consumers and businesses in the world but not many e-businesses can turn the opportunities into commerce. Lack of trust is one of the most frequently cited reasons for consumers not purchasing from Internet (Lee and Turban, 2002). Thus, our prime focus is to investigate the relationships between system risk, e-commerce usage intention, and the differences of their relationships. The technology acceptance model has its origin in the theory of reasonable action; it represents an important theoretical contribution toward understanding e-commerce usage and its acceptance behavior to measure the intention of e-commerce usage in the tourism organization mediated by perceived usefulness and perceived ease of use which considered the two intervening variables of the prediction.

The technology acceptance model continues to focus on behavioral intention, but with two significant changes that suggest attitude directly influences intention. The first change is that TAM excludes the subjective norm construct included in theory of reasoned action and theory of planned behavior (Ajzen, 1991, Ajzen and Fishbein, 2005). Davis (1989, 2000) suggests that in an organizational setting, individuals may choose to use IT to perform their job, or because their normative referents encourage them to do so. Davis asserts that previous measures of subjective norms are unable to capture the difference between internal motivation and external requirements to comply. The second change is that instead of focusing on general beliefs, TAM includes two new constructs that refer to specific beliefs influencing A toward the intention to use IT. The two new constructs in TAM are:

Intention to use e-commerce is defined as the organization's perception of both affect and cognition to engage in an online exchange relationship with costumers, such as sharing business information, maintaining business relationship and conducting business transaction (Zwass, 1998)

Previous research integrates trust with the model, arguing that trust relate to perceived usefulness and ease of use. Gefen and Straub (2002) also integrate trust, perceived usefulness and perceived ease of use in the context of e-services, Pavlou integrate perceived risk with the TAM model constructs (Pavlou, 2003)

Perceived system risk in e-commerce increase behavioral uncertainty and reduce related trust on e-commerce applications that provide online transactions. However, organizations are likely to go with e-commerce application if their risk perceptions and environmental uncertainties are alleviated so that they control over their usage, therefore, the following hypotheses are proposed:

1. The higher the system risk in tourism organization towards e-commerce, the less e-commerce is perceived to be useful.
2. The higher the system risk in tourism organization towards e-commerce, the less e-commerce is perceived to be easy to use.
3. The higher system risk in tourism organization towards e-commerce, the less it has intention to use e-commerce.
4. There is an indirect negative relationship between system risk and Intention to Use e-commerce through perceived usefulness.
5. There is an indirect negative relationship between system risk and Intention to Use e-commerce through perceived ease of use.

HYPOTHESES TESTING

The multiple regression model (Abrams, 1999) was employed to predict the relationship in the construct. Four basic assumptions were met: (1) linearity of the phenomenon measured. (2) Constant variance of the error terms (homoscedasticity). Independence of the error terms, and normality of error term distribution. Before the regression results were accepted as valid, the degree of multicollinearity and its effect on the results was examined. The two-part process (condition indices and the decomposition of the coefficient variance) was employed and comparisons made with the conclusions drawn from the variance inflation factor (VIF) and tolerance values. There is no high correlation between the independent variables in the regression as all condition indices and VIF fall bellow the threshold values.

Lastly, there was a check for outliers (i.e cases falling at the outer ranges of the distribution). A Threshold of 3 standard deviations was used, which is appropriate for our sample size of 88 to identify outliers. All observations outside this range (3o+) were considered outliers and were duly dropped from the regression.

The coefficient of determination (RA²) for the regression is .215 and .306 for perceived usefulness and perceives ease of use respectively, indicating that 21.5% and 30.6% of the variation in perceived usefulness and ease of use are explained by system risk. The p-value of .000 for both usefulness and ease of use indicates that the higher the system risk in tourism organization towards e-commerce, the less e-commerce is perceived to be useful and the less to be easy to use. Both hypotheses H1 and H2 are then accepted.

The coefficient of determination (RA²) for this regression is .138, indicating that 13.8% of the variation in intention to transact is explained system risk. The p-value of .000 indicates that the higher the system risk in tourism organization towards e-commerce, the less the organization intention to transact online. Hypothesis 3 is accepted.

The relationship between system risk on one hand and intention to use e-commerce on the other were mediated by perceived usefulness and ease of use. The hierarchical multiple regression model was employed to analyze the indirect relationships hypothesized (Abrams, 1999). The predictor variables (i.e. the independent variables and the intervening variables) were entered into the model in different stages. The hierarchical regression is employed so that the increase in RA² corresponding to the inclusion of each category of predictor variables and the inclusion of each category of predictor variables and the unique variance in e-commerce adoption explained by the predictor categorized could be examined. The RA² for all sets can be analyzed into increments in the proportion of Y variance due to addition of each new set of predictor variables to those higher in the hierarchy. These increments in RA² are squared multiple-partial correlation coefficients. The following general hierarchical model equation for four sets in alphabetical hierarchical order was adopted from Cohen and Cohen (1983):

A two model hierarchical regression is adopted in these analyses as suggested above to investigate the mediating effect of perceived usefulness and perceived ease of use between system risk in one hand, and intention to use e-commerce in the other hand, resulting to test our hypotheses H4 and H5.

As we can see from the table above, the beta coefficient for model 1 is significantly higher than of the model 2 in for both variables (i.e. perceived usefulness and perceived ease of use). Coupled also with the increase in RA² in both variables explain the mediating effect of usefulness and ease of use on the relationship between system risk and intention to use e-commerce. There is therefore an indirect negative relationship between system risk and intention to use e-commerce via perceived usefulness and perceived ease of use. There is validity for both hypotheses H4 and H5.

DISCUSSION AND IMPLICATIONS

As shown in the results, all of the causal relationships between the constructs postulated by the intention to use e-commerce variables are supported in the Algeria dataset. The results suggest that perceived risk has negative effect on executive managers' intention to use e-commerce This research attempts to validate perceived system risk as a factor that affects the usage behavior of the tourism organizations in Algeria using the technology acceptance model (TAM). The results of this study show that all our hypotheses were supported, which revealed the importance of perceived system risk as determinants of e-commerce adoption behavior. When the level of perceived system risk in Algerian tourism organization is high toward e-commerce usage, the usefulness and ease of use of e-commerce would be less perceived in the organizations, the two variables also acted as mediators between perceived system risk and intention to use e-commerce, which shows that perceived risk will have negative effect.

These results on Algerian tourism organizations are consistent with the finding of previous research (Pavlou, 2003) The findings of this study have significant implications in the perspective of research on e-commerce risk that describes the security measures in the e-commerce application in the organizations; it provides also further evidence on the appropriateness of measuring the e-commerce behavior using technology acceptance model (TAM) and its application in organizations. However, this research is considered among the early studies which applied this model on Algerian organizations.

The findings of this study also suggest important practical implications for information systems managers and IT-related businesses currently providing services/products on the Internet as well as those are planning to do so. It is evident from this study that in order to guide to adoption behavior of organizations to use e-commerce, perceived ease of use and perceived usefulness of the e-commerce applications should be enhanced by reducing the lever of perceived risk, information systems managers are willing to be involved in the e-commerce business and use its system when the perceived risk is relatively low. Thus, diminishing such risk is considerably important to e-commerce application providers. To lower the system risk, e-commerce applications providers together with business organizations should establish a robust mechanism which utilizes state-of-art Internet technologies. For e-commerce services providers to business organizations, it is more important for them to place full trust on the privacy, security, integrity and availability that it helps organizations to build the beliefs of ease of use. Further, to reduce system risk in business organization, the e-commerce providers should also build trust in the business organizations in term of support and giving them complete confidence of the usefulness of the e-commerce services they provide.

CONCLUSIONS

Research of organizational acceptance of internet-based e-commerce services may benefit by the inclusion of an operationalization of perceived system risk by improving their understanding of evaluation and adoption patterns of e-commerce by business organizations. From a practical perspective, understanding the cognitive beneath web-based system evaluation and the effect of product trial can enable improved web-systems design. As a result, in order to guide to adoption behavior of organizations to use e-commerce, perceived ease of use and perceived usefulness of the e-commerce applications should be enhanced by reducing the lever of perceived risk, IS managers are willing to be involved in the e-commerce business and use its system when the perceived risk is relatively low. With the projected growth of Internet-based ASP's and web-services, a multi-dimensional measure of adopter's uncertainty and perceived risk should enrich information systems adoption research in Algeria.

METHODOLOGY

Research Title

The question which is under research in this project is "What benefits customers are getting and what is level of risk they are taking in using online banking services?"

Research Methodology

This section includes the research work of thesis and it also includes the method of the research. This part also includes the tools which are applied and how they are applied so the finding will be unveiled. According to DANIEL MUIJS in his book Quantities research education he explains that research methods are other divided into two types. First is Quantitative and second is Qualitative method. According to JACOB (2001), Qualitative Research is a research method of investigation in which we describe ethnographic, naturalistic, anthropological field and observer researches. The concept of quantitative research is respondent is being questioned and the information that is gathered from those responses is then analysed on statistical grounds. In this research most of the data is gathered from the quantitative research method.

The present study was conducted in London. 10 major banks in London were selected. A five point likert scale questionnaire was used in the study which was ranged from strongly disagree=1 to strongly agree=5. The questionnaire included the statements measuring benefits and risks of online banking. The questionnaire was got filled by the customers of banks. The banks were requested to get the questionnaires filled by their customers during the banking hours. 300 questionnaires were given to selected banks for filling purpose. A total of 219 questionnaires were returned back. Out of 219 questionnaires 8 were rejected because they were incomplete. The rest of 211 questionnaires were included in the study for analysis. The participants were asked to tick the level of their agreement with 16 factors. 8 factors covered the perceptions of customers towards the benefits of online banking. The rest of the factors covered the risks of online banking. The respondents were given the full surety of confidentiality. The data was analyzed through the frequency analysis and mean score analysis.

PRIMARY DATA

Primary data can be collected through various means i.e. interviews, surveys and questionnaires. In this study data is collected by questionnaire which is filled by customers. The researcher was there to assist the customers as well in filling the questionnaire because if someone finds a difficulty in filling the questionnaire or is confused about a question, the researcher can explain the question to them to get the accurate and free of error results.

SAMPLING

Sampling is crucial for analysis. You cannot study every one every where doing everything (Miles et al., 1994)49. The idea of sampling is to get results which represent whole population although we don't go to every single person, although there is no guarantee that it would be perfect. The sample for this research is formed by following the rules of the purposive sampling of non probability. The Purposive technique was employed due to the requirement of data. In purposive sampling we might chose people who belong to a particular group or those who represent a diverse perspective on an issue (Leedy et al, 2005)44. When the target respondents are limited this is a most appropriate technique. So that is the way sample is collected and people using online banking are approached.

QUESTIONNAIRES

The question construction is really an art (Miles et al., 1994)49. The questionnaire is designed with great care under the guide lines provided by (Miles et al., 1994)49, Fisher et al., 2004)28,and (Leedy et al., 2005)44 . It follows the objective of the research. Closed ended questions are used in the survey due to limitation of time and budget. To minimise the problem of biasing, statements are mostly used rather than questions. Another possible problem in a survey could be the response set. To avoid these problems related questions are arranged quite a distance from each other.

LIKERT SCALE

To evaluate the degree of response by the online banking customers researcher has used the Likert scale to measure the opinion of the respondents. Rensis Likert was the first one who formed this rating scale to evaluate the people's attitude. A five point's scale is used in this research. One of the positive aspects of using this scale is that the respondent can have a choice of choosing from five different levels of behavioural choices starting from strongly agree till strongly disagree. Table below explains the five point's scale in further detail.

ETHICAL ISSUE

Qualitative data analysis is not only a technical matter. Researchers should not only focus on producing knowledge .Researchers must also consider the rightness and wrongness of their action (Miles et al., 1994)49. There is not defined set of ethical guide lines usable by qualitative researchers across a range of disciplines. However there are already some guide lines provided by the authors and the researcher adapted the utilitarian approach described by Miles (Miles et al., 1994)49 to avoid any ethical problems. All the participants have been given sufficient information about the purpose of the survey. Although this thing was kept in mind that the information provided to the participants about research was limited. This is to prevent the dilemma of bias. If participants are given too much information, they may behave differently than they would under normal circumstances (Leedy et al., 2005). A letter was sent to them prior to the survey to obtain their permission and their personal information. Confidentiality and anonymity are promised to those participants who do not want to expose themselves. Personal information will not be exposed. The participants have been offered the final result of the work in appreciation of their time.

RECOMMENDATIONS AND CONCLUSION

LIMITATION OF RESEARCH

This research is being done to examine the customers perception of online banking. It includes questions related to the facilities or benefits they are getting by the usage of online banking. And the second part includes the level of risk involved in using the online banking facility. If the research is being done in some other country the outcome could be different or if the whole population of online banking users in UK could have participated even then it could vary the results.

These results could also not be efficiently generalised to investigate the views of customers about online banking in other countries, as it is very possible that the customer's perception of online banking could have been different in other countries.

FURTHER DIRECTION FOR RESEARCH

The researcher tried his best to cover the topic as much as possible under limited budget and time constraint. However the scale of this topic is too wide and under limited budget and time it is very unlikely that all areas of the topic have been covered. For example it is very possible that one aspect of the benefits of online banking or risks of online banking may efficiently increase or decrease while the other may do the same as well depending on the scale of the research. Therefore, the impact of online banking on modern day customers may vary. This difference can be measured via several techniques such as the Mean, Median, Regression or Correlation etc.

Conclusion

The study was based on the sixteen factors mentioned in the literature review. It covered the benefits and risks related to electronic banking. The study examined the customers' perception of electronic banking by using these attributes. The mean scores of the benefits and risks are computed and ranked in the results. Customers considered minimization of inconvenience, minimization of cost transaction and time saving as vital benefits of electronic banking. They considered probability of government access, fraud and lack of information security as major risks of electronic banking. Customers do not consider reduction in HR requirement and improves service quality as major benefits. They also did not consider legal and security issues and high cost of services as major risks of electronic banking.

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