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ISSN : 1598-7248 (Print)
ISSN : 2234-6473 (Online)
Industrial Engineering & Management Systems Vol.18 No.3 pp.501-510
DOI : https://doi.org/10.7232/iems.2019.18.3.501

Investigating the Impact of Security Factors In E-business and Internet Banking Usage Intention among Malaysians

M.K. Normalini1,2*, T. Ramayah1, Muhammad Salman Shabbir1
1School of Management, Universiti Sains Malaysia, Penang, Malaysia
2Faculty of Business Management & Professional Studies, Management & Science University, Malaysia
Corresponding Author, E-mail: normalini_mk@yahoo.com, salman.shabbir55@gmail.com
June 3, 2019 June 14, 2019

ABSTRACT


The purpose of the present study is to identify the security factors that influence customer intention to continue using Internet banking in Malaysia. Data was collected through self-administered questionnaires distributed using the dropoff and pick-up (DOPU) technique to private and public sector companies who then passed the questionnaires to their staffs. A total of 163 usable respondents completed the questionnaires. The SPSS statistical analysis software package and Structural Equation Modeling (AMOS) method were used for data analysis and hypothesis testing. The results show that perceived authentication, perceived confidentiality and perceived data integrity are significant factors that influence customer intention to continue using Internet banking. However, Perceived Non-Repudiation was not significant in influencing the intention to continue using Internet banking in Malaysia. An understanding of the factors identified in this study will enable Internet banking providers to effectively and efficiently enhance the security of services and thereby promote continued usage of Internet banking among customers. This is the study to examine possible security factors as multidimensional construct effects towards intention to continue using Internet banking using structural equation modelling AMOS



초록


    1. INTRODUCTION

    Customers are apprehensive about the security of their personal financial information that could be accessed via the Internet. The electronic banking community recognized the security needs. Security is one of the important factors, which influence customer intention to use online banking (Sikdar et al., 2015). Therefore, the more internet banking users believe in high security online banking transaction, the more likely they will increase their usage of internet banking service (Tran and Corner, 2016). A number of technologies have been developed to ensure the security of electronic transactions. The 128-bit RSA encryption key technology to web browsers is the most common approaches used to secure online transactions in the use of digital certificates and firewalls.

    The key factors influencing customer adoption in Internet banking can be define in this study. Many studies conducted in Malaysia and other countries, which identified the trend of Internet banking growth adoption in Malaysia. Adoption of Internet banking in Malaysia and slow growth due to security and personal preferences factors (Suganthi et al., 2001). In Australia, the main obstacles to Internet banking adoption are due to security concerns and Internet banking awareness (Sathye, 1999). Furthermore, the safety and security of transactions over the internet were concerned by Internet banking customers in Australia. However, security issue in online banking have not been elaborately emphasized yet (Amin, 2016).

    According to Hussain et al. (2017), the main chal-lenge for banking sector is extensively usage of information technology applications related to e-banking. Which causes e-security threats, cyber-attacks on customer profile, account hijacking, frauds in terms of data messages, theft customer privacy, and get secrecy of financial transactions.

    2. LITERATURE REVIEW

    Security in the context of electronic banking is explained as follows: Threats can be made either through network and data transaction attacks or through network and data transaction attacks, or through unauthorized access to the account by means of false or defective authentication. Customers are afraid that their personal financial information would become available to others via the Internet and that they could be used for fraudulent purposes. The need for security has already been recognized within the electronic transactions. The most common approaches used to secure current online transaction are incorporating 128-bit RSA encryption key technology to the web browsers that keeps the customer information private as the data flows across the Internet, the use of digital certificates that has made identification easier and cheaper, and the firewalls (George and Kumar, 2013;Gupta and Sareen, 2001;Kaura et al., 2013;Kumar et al., 2017;Mann and Sahni, 2011;Ahmadi et al., 2014).

    Perceived security is defined as the customers‟ perception of the degree of protection against these mentioned threats. According to Yousafzai et al. (2009), measures the customers’ subjective perspective about secure Internet banking transactions based on their per-ceptions of timely, accurate, and safe data transmissions.

    Security, nowadays, is becoming a more important issue for business, and the need for authentication has therefore become more important than ever. According to Al-Harby et al. (2008), the use of biometrics systems for personal authentication is a response to the rising issues of authentication and security. The literature reviewed showed that acceptance of the use of biometric authentication methods was particularly high among participants who did not object to the registration of biometric data for authentication in Saudi Arabia (Al-Harby et al., 2008). Moreover, those respondents agreed that biometric authentication methods would improve e-commerce security.

    Information security encompasses not only technical issues but also human factors and is an ever-increasing problem that is becoming a key cause of fear among computer users. Even though there are almost an uncountable number of threats to information security, this number is unfortunately on the rise. For the average person using the Internet, information security may mean among other things, working with computers without being attacked by viruses, conducting online transactions with the assurance that credit card information will not be subject to theft and browsing e-mails without receiving unsolicited or undesired electronic messages (Huang et al., 2007).

    In Malaysia, weak security and Internet banking application trustworthiness are the central issues related to Internet banking. Therefore, this study will investigate security dimensions that influence the intention to continue using Internet banking applications

    As there are constantly increasing number of ways to penetrate security mechanisms, the risk of information theft, transaction tampering and corruption of data could become a reality. If security breaches occur, customers may incur damages ranging from privacy invasion to financial loss (Suh and Han, 2003). Many researchers have discussed basic security principles that are crucial for e-commerce (Aldridge et al., 1997;Bhimani, 1996;Furnell and Karweni, 1999;Gefen, 2000;Ratnasingham, 1998). In Internet banking, prior research has classified these into five categories: authentication, non-repudiation, confidentiality, data integrity and privacy.

    In this study, perceived security refers to the customers’ perception of the degree of protection against the Internet banking threats. Customers tend to have a better trust in Internet banking if higher level of security is believed to exist. Perceived competence, in this study is defined as the Internet banking customers’ perception on the skills, abilities, and expertise of Internet banking providers. Therefore, this study will investigate the relationship between perceived security and perceived competence towards customers’ trust in Internet banking.

    2.1 Perceived Authentication

    Authentication is defined as the process through which an Internet merchant can be established via a trusted third party that guarantees that the merchant is indeed who they say they are. Authentication ensures that the trading parties in an electronic transaction or communication are who they claim to be.

    Distinct usernames, personal identification numbers (PINs), passwords, and preferred security questions and answers are among the tools or access codes used to verify the identity of customers. These tools operate as keys to obtain access to customers’ personal accounts and financial information as well as banking facilities, products and services offered via the online banking system. Customers are advised to maintain the confidentiality of their personal codes by not sharing or providing easy access to them in order to preserve the integrity of access codes.

    2.2 Perceived Confidentiality and Perceived Data Integrity

    Confidentiality warrants that all communications between trading parties are restricted to the parties in-volved in the transaction. Confidentiality is very im-portant in the e-commerce world because of the possi-bility that hackers may obtain one’s sensitive information. Data integrity means that data in transmissions are not created, intercepted, modified or deleted illicitly (Suh and Han, 2003).

    Banks utilize a fusion of authentication, encryption and auditing mechanisms to provide assurance that there is safeguarding of the privacy, confidentiality, and integrity of transactions and information that is exchanged, disclosed, shared, stored or used in online banking systems. The combinations of these mechanisms function as a formidable barrier to guard against the penetration and abuse of systems in any form. Among the mechanisms used are:

    • secure sockets layer (SSL) channel

    • 128-bit Encryption

    • username & password protection and authentication

    • firewalls, and

    • account-locking

    Series of independent security audits are conducted to ensure that all mechanisms are systematically tested to protect and safeguard against known security issues and prevent any form of tampering or theft of information or threats to transactions.

    2.3 Perceived Non-Repudiation

    Non-repudiation is a mechanism to ensure that the clients (customers) can be certain they are communicating with the genuine server (bank), or vice versa, such that neither of the communicating parties can later falsely deny that the transaction took place. Logs of transactions are maintained and regularly updated by banks and record a variety of information including the nature, time, and date of transactions that have been entered into by customers. These records enable the verification of all types of completed transactions and provide the proof needed should any issue ever arise.

    2.4 Intention to Continue Using

    Behavioural intention measures a person's relative strength of intention to display a specific behaviour. It is likely that a person will adopt a specific behaviour if he or she intends to do so. This implies that behavioural intention (BI) to continue using internet banking is expected to have a positive influence on users’ interaction with online banking systems.

    3. THEORETICAL FRAMEWORK

    3.1 Model of Trust

    Customers trading in the e-commerce world face a variety of challenges and among the major issues faced is the problem of security which is caused by vulnerabilities found in the Internet, the foundation of e-commerce. When customers conduct transactions on the Internet, anyone from anywhere in the world may be able to access the information being transferred. As there are constantly increasing number of ways to penetrate security mechanisms, the risk of information theft, transaction tampering and corruption of data could become a reality. If security breaches occur, customers may incur damages ranging from privacy invasion to financial loss (Suh and Han, 2003). Many researchers have discussed basic security principles that are crucial for e-commerce (Aldridge et al., 1997;Bhimani, 1996;Furnell and Karweni, 1999;Gefen, 2000;Ratnasingham, 1998). In Internet banking, prior research has classified these into five categories: authentication, non-repudiation, confidentiality, data integrity and privacy.

    3.2 Data Collection Method

    The primary participants are Internet banking users in Peninsular Malaysia (Such as Penang, Selangor, Kuala Lumpur and Johor). Data comes from personal Internet banking users who perform banking transactions via Internet banking. Data collection of this study was through a self-administered questionnaire. In this research, drop-off and pick-up (DOPU) technique was employed. The questionnaires were distributed through this method to private and public sector companies who then passed the questionnaires to their staffs. A total of 163 usable respondents completed the questionnaires as requested. The questionnaire consisted of 2 sections. The first section collected the demographic data, the second section elicited information about perceived security dimensions and intention to continue using Internet banking. The sam-pling method used in this research is purposive sampling because this method is confined to specific types of people who can provide the desired information which are Internet banking users.

    3.3 Research Model

    The influence of privacy and security on users’ ac-ceptance of e-banking services has been supported by several authors (Sathye, 1999;Poon, 2007). Based on the five basic security factors identified for Internet banking, this study constructed a theoretical framework which can be found in Figure 1. To test the framework, four hypotheses were proposed to understand the relationship between the security factors towards intention to continue using Internet banking. The following are the hypotheses that were proposed and tested:

    • H1: Perceived Authentication has a positive impact on intention to continue using Internet banking.

    • H2: Perceived Confidentiality has a positive impact on intention to continue using Internet banking.

    • H3: Perceived Data Integrity has a positive impact on intention to continue using Internet banking.

    • H4: Perceived Non-repudiation has a positive impact on intention to continue using Internet banking.

    3.4 Population and Sampling

    The population for this study consisted of Internet banking users from Malaysia. A non-probability sampling technique, specifically purposive sampling, was used for this study. Data was collected using self-administered questionnaires that were circulated to respondents using the drop-off and pick-up (DOPU) technique. There were a total of 163 usable responses which were retrieved from public and private sector companies who help to distribute to their staff which is Internet banking users. The measures were all adapted from published literature (see Table 1).

    4. FINDINGS

    4.1 Demographic Profile

    The questionnaire consisted of two separate sections. The first section was designed to collect demographic data and the second section elicited information about perceived authentication, perceived confidentiality, perceived data integrity, perceived non-repudiation, and intention to continue using Internet banking. The sampling method used in this research was purposive sampling because the method targets specific types of people who can best provide the desired information for the study, namely Internet banking users.

    Table 2 presents the demographic data for the 163 respondents who were Internet banking users in Malaysia. The data includes variables such as gender, age, race, highest academic qualification, occupation, working experience (total number of years), total number of years of internet usage, total number of years of internet banking usage and primary place of Internet banking use.

    The majority of respondents were young and middle aged adults, with almost 67.50 percent within the range of 19 to 39 years old. As expected, the respondents were highly educated and the majority of them had academic qualifications, namely, certificates or diplomas (9.8%), degrees (53.4%) and postgraduate qualifications (33.7%). The majority of respondents (61.3%) were of Malay ethnicity. Respondents mostly categorised themselves as professionals (56.4%) while 23.9 percent of respondents held executive level positions and placed themselves under the category of “others” (e.g. marketing executive, auditor, bank executive, finance officer, HR officer). Almost all respondents had work experience and most of them had worked for at least 1 to 20 years (80.37%). The fact that 98.16% of respondents had used the Internet for a period of 1 to 20 years suggests that most of them could have needed access to the Internet for work. However, 57.67% of respondents had only used Internet banking for a period of 0 to 6 years. Majority of the Internet banking users’ access their accounts at home which is 56.4 percent and office which is 38 percent.

    4.2 Measurement Model

    Structural Equation Modeling (SEM) analysis using AMOS 23 was used to estimate the measurement and structural model for quality and fit. For the measurement we followed the suggestion of Hair et al. (2014) by testing construct reliability, convergent validity, and discriminant validity. For a good model fit, the Chi-square normalized by degrees of freedom (χ2/df) should not exceed 3, goodness of fit index (GFI) should exceed 0.9, adjusted goodness of fit index (AGFI) should exceed 0.8, Tucker-Lewis index (TLI) should exceed 0.9, comparative fit index (CFI) should exceed 0.9 and root mean squared error (RMSEA) should not exceed 0.08. The results showed that the χ2/df was 1.933, GFI = 0.854, AGFI = 0.804, CFI = 0.961, TLI = 0.953 and RMSEA = 0.076 suggesting adequate model fit.

    Fornell and Larcker (1981) suggested that if all indicator loadings exceed 0.7 and the average variance extracted (AVE) for each construct exceeds 0.5 then we can conclude that convergent validity has been established. As shown in Table 3, all item loadings exceeded 0.7 and we can see that the AVE is higher than 0.5. It was also suggested that satisfactory discriminant validity is established when the AVE of a particular construct is greater than the correlation shared by that particular construct with other constructs in the model (Fornell and Larcker, 1981). As such we can conclude that the construct validity of the scales is good. Next, we proceeded to test the discriminant validity. Discriminant validity can be examined for a construct (Fornell and Larcker, 1981). As shown in Table 4, the squared correlations for each construct are less than the square root of the average variance extracted by the indicators measuring that construct indicating adequate discriminant validity. In total, the measurement model demonstrated adequate reliability, convergent validity, and discriminant validity.

    4.3 Structural Model

    First, we looked at the structural model fit and the results showed that χ2/df was 1.933, GFI = 0.854, AGFI = 0.804, CFI = 0.961, TLI = 0.953 and RMSEA = 0.076 suggesting adequate model fit. The results are shown in Table 5. As the Mardia’s coefficient was 275.76 which suggests that data was not normally distributed we used bootstrapping to correct the standard errors (Noor Hazlina & Ramayah, 2012). As shown in Table 5 Perceived authentication (β = 0.368, t = 1.989, p < 0.05), Perceived Confidentiality (β = 0.193, t = 1.911, p < 0.05), Perceived Data Integrity (β = 0.391, t = 2.472, p < 0.01) were positively related to Intention while Perceived non-repudiation (β = 0.012, t = 0.120, p > 0.05) was not significant. All the variables explained an R2 of 0.62 which shows that they explained 62% of the variation in Intention. The most influential predictor of Intention was Perceived data integrity followed by Perceived authentication and Perceived confidentiality which shows that the users of Internet banking in Malaysia are very much concerned with data integrity.

    5. CONCLUSION

    The explosive growth of Internet services prompted enterprises to consider adoption of emerging technologies. The swift development of information technology in banking sector resulted in a several forms of Internet banking services, which perhaps, but not surprisingly have transformed the banking industry at large. However, security concerns are among the main reasons found to hinder the growth and adoption of Internet banking services.

    Recent studies on internet banking have widely been recognized the role and importance of security concerns in customer adoption of Internet banking, and perhaps, cautioned internet security researchers to explore more on security dimensions. Though, a little attention was given to explore security concerns empirically. Here, the current study employed a model, which incorporates the main dimensions of security to identify factors that influence intention to continue using Internet banking; namely perceived authentication, perceived confidentiality, perceived data integrity, perceived non-repudiation.

    Unexpectedly, this research has found that perceived non-repudiation has an insignificant impact on customers’ intention to continue using Internet banking. The findings of this research may affect from the region selected for empirical investigation and might be that Internet banking customers in Malaysia have the perception that other issues such as authentication, privacy and data integrity are more important and serious compared to non-repudiation issues. Accordingly, it might be said that the insignificant effect of perceived non-repudiation on on customers’ intention to continue using Internet banking, can be explained by two reasons. Firstly, perceived non-repudiation would not be valued as a serious concern, leading to low closer valuation. Secondly, perceived non-repudiation is not satisfactorily understood among respondents.

    On the other hand, authentication has been proved to have a significant positive impact on customers’ intention to continue using Internet banking. The rational justification of this finding might be that once the perceived strength of authentication is high, an increased level of customers’ intention to continue using Internet banking is then possible. The findings of this study are in line with proceeding research on internet banking security issues (Aldridge et al., 1997;Bhimani, 1996;Furnell and Karweni, 1999;Gefen, 2000;Ratnasingham, 1998;Suh and Han, 2003). Furthermore, it has also been found that confidentiality has a significant positive impact on customers’ intention to continue using Internet banking. It can be concluded that confidentiality might facilitate the development of continuance usage of internet banking since banking usually require accurate and reliable information.

    Consequently, this study supports the important role of data integrity as a significant determinant of customers’ intention to continue using Internet banking. Therefore, it can be concluded that data integrity might facilitate the continuance usage of Internet banking since data in transmissions are not created, intercepted, modified, or deleted illicitly. The rational justification of this conclusion might be that once Internet banking customers in Malaysia have confidence in the reliability of Internet banking, they might have positive feeling about conducting banking transaction online via the use of Internet banking.

    6. IMPLICATIONS AND SUGGESTIONS FOR FUTURE STUDIES

    The findings of this research provide some valuable implications especially for the banking industry in Malaysia by offering useful insights for improving internet banking security and attain continuous usage by customers. From users’ perspective, security dimensions of authentication and perceived confidentiality were found significant in developing users’ intention to continue usage of Internet banking. These findings of the study are advantageous for the banks and provide empirical evidence of perceived importance of authentication and con-fidentiality, which will help banks to design their internet banking with these security dimensions. Furthermore, the study also aimed at highlighting the role and importance of authentication, perceived confidentiality, and perceived data integrity in order to improve, refine, and implement internet banking security and ultimately achieve continuous Internet usage. Finally, the present study has extended the literature of Internet banking by providing empirical evidence of the significant effects of security dimensions on customers’ intention to continue using Internet banking.

    The current study examined the dimensions of security to identify factors which can influence intention to continue using Internet banking; namely perceived authentication, perceived confidentiality, perceived data integrity, perceived non-repudiation. Consequently, it is hoped that this internet banking security model will initiate new discussion pertaining to the many concerns of internet banking security. However, the identification of most relevant internet banking security antecedents still needs further exploration. Future research in the area of internet banking security in Malaysia is, therefore, suggested to further explore the determinants of internet banking security and offer a comprehensive model in order to extend the literature in the domain. Additionally, special efforts can be made to determine what dimensions of security contribute to negative attitudes towards using internet banking, and how attitudes can be changed to raise internet banking usage intention. Banking industry may use the findings of this research by designing their internet banking security features that respond to the special needs to the customers, subsequently increasing positive attitudes towards internet banking usage.

    ACKNOWLEDGEMENT

    The authors acknowledge all reviewers for their comments on this manuscript. This article is supported by the USM Short Term Grant (No: 304/PMGT/6315136).

    Figure

    IEMS-18-3-501_F1.gif

    Research framework.

    Table

    Questionnaire items used in this study

    Profile of internet banking respondents

    Convergent validity

    Discriminant validity

    Hypothesis testing

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