Impact of Security on Consumers' Intentions to Use Online Financial Services

Table of Contents
1. Introduction
1.1 Background of Research Study
1.2 Research Problem
1.3 Research Aim
1.4 Research Objectives
1.5 Research Questions
1.6 Significance of Research Study
2. Literature Review
2.1 Dependent Variable
2.2 Independent Variable 1
2.3 Independent Variable 2
2.4 Independent Variable 3
2.5 Independent Variable 4
2.6 Literature Review Summary
2.7 Research Model
3. Research Methodology
3.1 Research Methodology Overview
3.2 Research Design
3.3 Data Collection Method
3.4 Sampling Process
3.5 Data Analysis
3.6 Research Methodology Summary
4. Expected Outcomes
5. List of References

1. Introduction

1.1 Background of the Research Study
As the continually growth of international economy, the institutional and market
completeness advanced, the commercial banking is forced to undergo rapid change.
Technology is the major key driver for these developments, which is breaching the regulatory
barriers in order to create new products, services and market opportunities. These products
and services includes delivering financial services in electronic and remote distribution
channel via mobile application or website at anytime, everywhere with faster speed and lower
cost compared to the traditional retail banking systems (Faullant, 2008 ; Daniel, 1999 ;
Reiser, 1997). Thus, it helps to embrace the advance system-oriented business practices and
management process for all industries (Brodie et al, 2007; David et al, 2008).
There was major research which focuses on identifying the congenial consumer
innovativeness and new product adoption behaviour (Foxall & Goldsmith, 1998; Manning et
al, 1995). According to Midgley and Dowling (1978), a contingency model of innovativeness
in which user’s tendency interact with their personal attitudes to account for new product
adoption behaviour.
Based on Hutchinson (2000), there are statistics indicate that Internet Banking shows up more
than 50% of all banking transaction with 15% expanding rate per year. Yet, data information
security and privacy being the primary concerns for both business and consumers (Ernst &
Young, 1999). Hence, the security and privacy of the Internet Banking transactions as well as
the processing of personal data information could be the issue for online financial services
adoption (Hutchinson & Warren, 2001).
The underlying models employed in this research given a better understanding of the personal
perception on security and privacy and attitudes factors that will potentially help to
consummate the intention to use the online financial services by giving supported data
information to increase the intention to use the services. In addition, this paper reports the
results of quantitative study of the on security, privacy and marketing strategy as well as their
attitudes towards online financial services. The findings will be useful for both banking

sectors and researchers who seek to further understand the factors relevant to online financial
services.
1.1 Research Problem
Based on Gartner Group’s 1999 report, online banking has been rapidly growth from 10
million adults in 1999 to 35 million adults by year 2003 (Barto, 1999). Besides that,
China Merchants Bank has launch the first internet banking system in 1997 and spread
rapidly within mainland China (Li, 2002). Furthermore, Maybank was the first bank to
provide online financial services in Malaysia on June 15, 2000. However, this online
financial services have not been rapidly growth, implemented by the other banks and
substituted for traditional banking system. Moreover, there were about 60% of people
who used cheques or physical cash as primary source. According to Ndubisi & Shinti
(2006), Internet Banking in Malaysia is still in an infancy stage, which given difficulty for
banking industry to develop and use the online financial services and system.
There is research that shows evidence to support a positive relationship between personal
perceptions and the intention to use the online financial services. The personal
perceptions were found to be the consumers’ intention of using the online financial
services (Black et al, 2001). However, Ndubisi (2006) stated that there is an additional
dimension were found to influence people’s intention of use and the decisions making,
highlighting the personal attitudes of the intention and decision for using the online
financial services.
Hence, this research focus in the intention to use online financial services by users in
evidence among people in Malaysia. It will help in further understanding on the factors
that decreasing the intention to use the online financial services among people in
Malaysia.

The research problem aim to focus on the decreasing of the intention to use the online
financial services which lead the transaction volumes of all banking industries reduced.
Besides that, it will also rise in the Public Relation efforts. As a result, it will impact the
business performance and revenue of the bank. Hence, the bank will lose their brand
reputation, meanwhile increase the brand switching behavior.
The following shows the DV consequences diagram.
↓ Decrease in the transaction
volumes
↓ Decrease in the brand reputation
↓ Decrease in consumers’
intentions to use online
financial services
↑ Increase in the Public Relation
efforts
↑ Increase in the brand switching
behavior
1.1 Research Aim
This research aims to increase the intention to use the online financial services among people in
Malaysia in order to increase the transaction volumes and brand reputation, meanwhile minimize
the Public Relation efforts and brand switching behavior of all banking industries. Hence, the
business performance and revenue of the bank will increase.
The following shows diagram of the impact of the research DV in solving the research
problem.
↑ Increase in transaction
volumes & brand
reputation
↑ Increase
in
consumer’s
intentions
to use
↑
Increase
profitabil
ity &
revenue

online
financial
services
↓ Decrease in Public
Relation efforts & brand
switching behavior
1.4 Research Objectives
Based on the research aim, there are several research objectives been developed in this research study
develops as shows in the following:
RO1 – To examine the relationship between security and consumers’ intentions to use online
financial services.
RO2 – To analyze the relationship between advertising and consumers’ intentions to use
online financial services.
RO3 – To investigate the relationship between marketing promotions and consumers’
intentions to use online financial services.
RO4 – To assess the relationship between Technology Acceptance Model (TAM) and
consumers’ intentions to use online financial services.
RO5 – To evaluate the most important factor, such as security, advertising, Technology
Acceptance Model (TAM) and marketing promotions that impacting the consumers’
intentions to use online financial services.
1.5 Research Questions
Based on the preceding research objectives, there are five research questions being discussed
as follow: