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Online banking is a system that allows individuals to perform banking activities anywhere via the internet. Examples of internet banking activities are account transfers, bill payments, online loan and even credit card applications. Online banking has been so familiar among Malaysia citizens. So many issues were brought when online banking was first being introduced. The security, clarity and how far can we trust transactions using the internet were the most popular issues at that time.
Furthermore Malaysians are trained to use physical or traditional banking instead of via internet. Online banking is often use in B-2-B, B-2-C and other types of e-commerce. There are many scams and viruses in online banking. The security of internet banking is still being hesitated by most of consumers. Because of lack of information technology, people tend to believe the scams and often we can see most of the consumers being cheated are from the age of 40 and above.
Background of study
Normally people will not reveal much information about themselves. But for banking there is an exception no matter how important that information are. Banking via internet requires a lot of personal information from all aspects.
Cybercrime is growing rapidly in this country. We do not know whether our information is being kept safe and sound as the hackers know everything and they tend to do anything just to get the important information. How far the security does helps in saving our information? What are the types of cybercrime that might breach the protections of the security? Information security is protection of information from being disclosed, misused or destructed. Information security is more concerned with confidentiality, integrity and availability.
Nowadays majority of the businesses are using e-commerce as their main method to reach to the consumers. The high technology makes everything goes easy for the business as well as the customer. But without they notice, existence of competitors that might breach the protection and that could lead to bankruptcy, lost of business and trust from the customers.
One of the major factors that can slow down the rapid growth of e-commerce (EC) is the concern for the information privacy. (FTC, 2000; Hoffman et al., 1999; Malhotra et al., 2004). Even though many of online businesses build the policies that designed to signal trustworthy organizational practice (Meinert et al., 2006; Pollach, 2006) and there is also proven that this would influence customer's confidence in buying online (Earp & Baumer, 2003). But most of the customers still believe that revealing information online can lead to personal privacy problems (Sinclaire et al., 2006)
Objective of the study and research question
The major objective of this study is to know and investigate how far does online security can protect our information. In other words this study wants to know the function of trust in the electronic commerce transactions especially in Internet banking implementation. Besides, this study also do research the disadvantages of Internet banking which is by having a weak security and trust.
Electronic commerce requires people to do online transactions by transferring money via Internet from one party to another party. The most common websites that already established ages ago and internationally are Ebay, Amazon and recently Wal-Mart. These established website have its own high level of security that no one can breach the system. Same goes with the entire established website. But how far can we trust those website since scams, phishing and cybercrime are everywhere.
Different cases happen for the small businesses that runs the business through the Internet. We as a consumer has to take the risk when buying online because this small businesses might have a fake account on the Internet just to trick the consumers. Often we can see those who did not know anything about Internet can easily being cheated by those fake website.
In Malaysia, CIMB Bank and Maybank and other commercial banks are doing great in serving the consumer via the Internet. Those banks offer an online transactions, housing loan, pay bills and also investments. This types of online transactions required consumers to share all the details. This might be dangerous if consumers do not know how to differentiate between the original website than the fake one.
So in order to investigate about how perceived information security affects the level of the trust in Internet banking by users, following researched questions are formed;
What are the factors that can affect the trust in electronic commerce or Internet banking adoption?
How far does the security establish and gain trust from consumers?
What is the level of trust in using Internet banking among consumers?
To focus on all of the questions, there is a need to examine in established appropriate policies and criterions in Malaysia.
Scope of the Study
Most of the articles in newspapers and internet highlighted the positive things of Internet banking adoption and electronic commerce. Even the government of Malaysia also promotes its own website that can serve anything including paying summons, taxes, and so much more.
This study is focusing on the relationship between trust, perceived information security and its factors and antecedents by considering three dimensions which are confidentiality, integrity and availability.
So this study evaluates the Internet banking adoption from consumers' perception whether they find it useful and secure whenever they are using online banking transactions. The information security is best described with three concepts of confidentiality, integrity and availability.
Limitations and Suggestions for Future Research
This study has the same limitations as other empirical studies in that "confirmatory findings should be viewed as scientific findings only to be extent that they can be replicated in subsequent studies," (Stewart and Segars, 2002 p. 45).
The survey is difficult in terms of information gathering and data collection from the right people and the limited time for distributing and gathering the data from the survey questionnaires. The most important thing is the honesty and truthfulness of the respondents in answering the survey that can affects the result of this study.
Number of many respondents is needed in order to have a good quality finding. In this study the total number of 150 responses can be collected. The target respondents are among the students in MMU Melaka so the sample cannot be a true image of the Internet banking adoption among Malaysian population.
So for future research, wide range of respondents can really helps in getting a good finding. Plus the respondents should be the people all over Malaysia or at least a representatives from each states. Besides this study only focus on the relationship between Information Security and its antecedents and the result or consequences. In future, a research on other antecedents could be examined.
Chapter 2: Literature Review
In this chapter, the review on related literature in Internet banking, Electronic Commerce, Information Security, Trust and ethical view in e-commerce are explained. This review provides the theoretical foundation and also guides to the development of the theoretical framework for the research of Malaysian consumers of online banking.
2.1 Internet Banking
Internet banking is defined as anything to do with banks transactions via online for example, "Cimbclicks" and "Maybank2u". In other words, "the delivery of banking services through the open access computer network (the Internet) directly to customers' home or private address" (Lau, 1997). This online system helps in building the financial institution because it broadens the range of customers as well as the locations. As we know, Internet banking can be done anywhere and anytime provided with the Internet access. It gives the benefit to financial institutions or bank as well as the consumers. More consumers are feeling comfortable for the fact that now they can access and do any transactions online from anywhere and anytime they want. The services that the banks are offering is transferring funds, paying bills, housing loan, credit cards service and so much more. Plus by having these types of services, banks can implement and try their new strategy to the consumers such as a new product or services that can attract more consumers. Banks can increase their income through Internet by charging a certain fees to the consumers. For example, Cimbclicks will charge a certain amount (RM 2) from Cimbclicks users if they transfer the fund to other banks. New strategy implemented can boost the income as well as the relationship with the customers.
As Internet banking is growing rapidly, it needs the development and implementation of a safe and sound security. The system must be fully supervised by the professionals and experts. It requires the bank to design effective methods which a user can be recognized and authenticated in a distant environment. One user must have identification and that user can only access their site by using ones code or password. The banks have to maintain, manage and keep the privacy of the user from being breached by other parties. This identification is important to user and must keep privately in order to not being duplicated by others. Some of the technologies that been used do meet the certain requirements for national, regional and global Internet banking assurance.