Factors that influence adoption of online transaction in Malaysia

Author: Iloka Benneth Chiemelie
Published: 15th-December-2014

Abstract
In the wake of the increased adoption of information n communication technologies, businesses have drawn new lines on how to undertake their operations in order to ensure effective deliver and increased profitability. This is because information and communication technologies have ushered in a new era of convenience and security. For instance, consumers in the banking sector don’t need to queue up in long lines anymore as they can convenient performing their banking transactions via ATM, online or phone. However, there are indications that while communication and information technologies are on the rise, some consumers are reluctant to adopt such technologies due to a number of reasons. Some of the most referenced reasons include security issues, privacy issues, and ease of use. On the ground of such understanding, this research is developed to understand factors that influence consumer’s decision to adopt e-banking services in Malaysia. Following extensive primary and secondary research, the reasons became clear in view and when Malaysia is referenced as is the case of this research, the factors influence: security, privacy, risk, and trust. Malaysian consumers will likely adopt e-banking services if they trust the facilities offered by the bank; an associate such transaction with lower risk, higher security, and higher privacy.

CHAPTER 1

INTRODUCTION

1.1. Background

In the business setting as well as in the world of research and academics, a number of questions has been raised as to what influences consumers’ to buy. The main factor guiding such intention is to understand ways that brands can actually increase sales by increasing consumers’ purchase intention. While the question has not been so easy in the conventional world, the recent increase in development, adoption and penetration of information and communication technologies has further expanded the question in the area of e-commerce.

Yulihasri et al. (2011) conducted a research to understand the factors that influences consumers’ adoption of internet technology with focus the Malaysia market. The researchers further expanded the understanding by laying down detailed discussion on the present increase in internet adoption as it influences e-commerce – thus calling on brands to be more responsive towards providing customers with online sales. Still on their discussion, the main element present in their research with respect to why consumers’ prefer online shopping and transaction is because of the convenience and ease of use that it does come with. This can be further expanded with the factual understanding that unlike the conventional shopping world that can be limited by time, location, or brands, the online shopping world is actually unlimited as consumers can shop 24/7 at any given point and any given place in time so long as they have access to the internet.

In a different but related research with more focus on the factors that influences consumers’ adoption of internet banking; Syed et al (2009) present their own view with respect to the same Malaysian market. The main emphasizes from their research is that the increase in internet adoption within the corporate level helps companies to reduce their overall operation cost by influencing decrease in employees demand as well as resources. Customization also means that companies can now afford to charge higher than they used to because they would take the influence of tailoring services and products to create costs that did not previously exist (Parisa, 2006).

While a number of studies have highlighted the benefits of online transaction for both customers and consumers’, there are also studies reflecting on the potential risk of such to both parties. For instance, the research by Pang (1995) identified a number of issues related to e-commerce and online transaction with respect to both the company and the individual. For the individual, the research made known that the increasing adoption of online shopping has subsequently increase risks such as hacking and unauthorized permission into personal information and causing subsequent losses to the customers (Pang, 1995). On the side of the company, it is much worst because unauthorized access to the company’s information can lead to millions of losses for the bank and customers (Pang, 1995). There are renowned cases already documented across the world such as the case of Samsung’s hacking, in which hackers bypassed the system’s security and defrauded customers millions of dollars. Thus, the decision to adopt online banking is very difficult for the consumers as a result of the numerous risks that can be associated with such operations, which can deter these users from making use of the online transactions.

1.2. Problem statement

As discussed above, Pang (1995) has identified a number of problems related to online transaction with respect to influence on both consumers and companies. Online transaction has without much doubt increased risk in commerce and business process especially when considering the fact that victimizers can come from any part of the world, which reduces the chances of identifying them. Thus, the main problem with online transaction when reflecting directly on consumers is that it exposes them to lose of information and financial fraud as well as other damages such as impersonation and damages to personal image. It can also lead to unauthorized access to and loss of important personal documents in the process. All these issues lead to reduced intention from the consumers to adopt online transactions and a subsequent reduction on sales for companies (Pang, 1995) Thus, this is the main problem this research is designed to solve in order to define new approaches that will help in advancing consumers’ overall experience and security.

1.3. Importance of research

In the present business setting, understanding why consumers purchase is very important to producers because it helps to design products and services aligned with such influence and ensure that sales is more or less guaranteed. Consumer behavior has been very important since the inception of consumers’ purchase and decision making process, with numerous studies already aligned in that field. Additionally, meeting the needs of consumers is the easiest way to guarantee success as it will increase consumers’ level of satisfaction, increase repurchase intention, increase recommendations of the brand for other consumers, and thus increase sustainability in sales for the brands (Chan, 2001; Johnson et al., 1995; Jeon and Rice, 1997; Baldock, 1997).

In any case, the present research has called to mind the fact that while it is important for brands to understand the needs of consumers and tailor their services towards meeting such needs, not all of such approaches has been successful as complications can exist with respect to needs when comparing people from different locations, cultures and with different lifestyles (Chan, 2001). Additionally, increasing level of e-commerce adoption in the world has also increased associated risks for both consumers and companies (Pang, 1995). This is because hackers have devised numerous ways of gaining access to personal information and misusing them. On that accord, it can easily be understood that consumers will be very reluctant to adopt online transaction when they are aware of these security issues, and in cases where they even decide to make such adoptions, they will be precautious (Pang, 1995).

Thus, the importance of this research is reflected on the fact that it is designed to understanding and analyzes the factors that influence consumers’ decision to purchase online. In the process of meeting such objectives, the research will also analyze existing theories in the area of study as well as help in enhancing these theories with findings that will be made from the study. This study is considered important because it will help managers to understand the main reasons why consumers shop online, and how these consumers go about such process, thus creating the right framework for an enhanced customer service. Additionally, it will also help to understand consumers’ fears when it comes to shopping online, and devise way that these issues can be resolved to ensure higher experience rate for consumers online.

1.3. Research purpose

The purpose of this research is already defined in the research title: understanding factors that influence consumers’ purchase decision online in reference to Malaysian consumers.” Thus, the research is built on how such factors that be enhanced or mitigated by determining what factors influences consumers decision making process and how such influence is shaped. In the view of that, the research s built on the following objectives as presented below.

1.3.1. Research objectives

The objectives of this research are:

To understanding the factors that influences Malaysian consumers’ online purchase
To understand how these factors are shaped and build towards such influential role
To understand the kind of influence that these factors have with respect to online purchase
To understand how the influence can be mitigated or enhanced for the purpose of increasing consumers’ confidence in online purchase and overall sales for companies in that section.

1.3.2. Research questions

In order to achieve the set objectives, these questions shape the whole research process and define what is to be done and how it will be done.

What are the factors that influences Malaysian consumers’ online purchase?
How are these factors shaped and build towards such influential role?
What are the kinds of influence that these factors have with respect to online purchase?
How can the influence be mitigated or enhanced for the purpose of increasing consumers’ confidence in online purchase and overall sales for companies in that section?

1.4. Limitations of research scope

In the view of the above discussions and overall definitions of the research purpose, process and approaches, a number of limitations can be defined with respect to the research scope. In any case, it is important to start with redefining the scope of the research, and the scope is centered on understanding factors that influence Malaysian consumers’ adoption of online transactions. It should also be noted that online transaction in this case reflects any form of transaction conducted electronically such as online shopping, online banking, POS and other e-Commerce based transactions. Thus, while the scope is very direct towards “influential factors on online transactions,” the area covered is very wide; making application of findings less direct as there is no clear definition of a particular area of reference group when it comes to applying the findings.

This limitation can further be expanded in its view by stating that the finding can be applied in any of the forms of online transaction (banking, shopping, booking flights, hotel reservations, games, stock trading etc.) which makes it very limiting as there is no guarantee that a given finding can be applied to all of these areas. Thus, the scope of the research can be defined as being limited in applicability. The reason for that is because online transaction is very fast and reflects virtually all industries in the world.

In any case, it is also important to understand that irrespective of the vast nature of the areas for applicability, the overall nature of the research cannot be considered void because it still meets the objectives of understanding consumers’ decision making process in online transactions. Additionally, it should be noted that irrespective of the vast nature of industries that undertake online sales, the actual process of online transaction is similar. The process basically involved consumers ordering what they want online and making payment for such orders with their credit or debit cards. Other payment platforms such as Paypal and online payment engines can also be used for the same purpose. Thus, it can be expected hat the decision making process will be similar as a result of measured similarities with the actual process involved. Thus, findings form this paper are still considered highly vital for decision makers in organizations because it will help to them in understanding the factors that influence consumers’ decision making process and ensuring effective delivery.

1.5. Organization of research

Figure 1.1: organization of research

The figure above provides a clear illustration of how the whole research process is organized. The research starts with the introduction, which provides clear and defined approaches that will be adopted in the research process as well as defining the purpose and objectives of the research.

The second chapter provides review of related literatures as the bases of defining variables that will be tested in the primary research. The third chapter defines approaches to be adopted in the primary research. The fourth chapter is an analysis of the findings from the primary research as well as discussion on how the primary research meets set research objectives. The final section is the conclusion, which presents a summarized view of the overall research and findings from the research process.

CHAPTER 2

LITERATURE REVIEW

2.1. Chapter introduction

As already noted in the organization of study from the chapter one, this section is designed to conduct a review of related researches in the area of factors that influences consumers’ acceptance and adoption of online transaction. Thus, this chapter will seek to meet such purpose by defining theories related to the research topic and developing variables that will be used for the primary research.

2.2. Framework for review

Figure 2.1: framework for literature review

From the above framework, it can be seen that the review of literature will be aligned with the defined objectives and stated research questions. This is because the whole process will be based on understanding the benefits of online transactions to consumers, the factors that influence consumers’ adoption of online transaction, and the issues expected to come from such process as well as solutions for these expected issues.

2.3. Impact of online transaction on consumers

A number of benefits emerge from the adoption of online transaction and consumers are expected to take advantage as well as enjoy these benefits. Chan (2001) made known that convenience is one of such benefits. Compared with the offline platform, consumers enjoy a vast level of convenience when it comes to online transaction as it can be conducted any place and point in time so long as the consumer has access to the online facility. Thus, unlike the conventional process where sending money to friends during the weekend is not possible, online transaction via e-Banking ensures that consumers can send money to anybody at any point they so desires to do such. Johnson et al. (1995) also concurs with the idea of convenience as one of the benefits that consumers can gain from making use of online transactions, thus validating the claims made in respect to that benefit. Still on the side of convenience as a benefit from online transaction, it has been found by Devlin (1995) that consumers now demand improved convenience and accessibility from brands. Thus, adopting online transaction will increase consumers’ overall experience with a specific brand as it increases their level of convenience. It could also be argued as the main reason why companies offer online transactions to consumers but such argument will be validated later on in this research. Such understanding is also reflected in the banking sector where loner hours are spent in queue by consumers as they seek to perform specific transactions with online transaction reducing such long hours significantly.

Another benefit found by Baldock (1997) with respect to online banking is that it removes the issues of time, place, and firm constraints. For instance, a farmer in African can order fertilizer from a Chinese firm via www.Alibaba.com and effectively increase the production of farms where the ordered fertilizers are used. The main reason why such is possible is because in the online setting, transactions can actually be conducted from anywhere and at anytime as long as the consumer has access to computer and internet connection for such purpose (Chan, 2001; Johnson et al., 1995; Jeon and Rice, 1997; Baldock, 1997).

Birch and Young (1997) also conducted research in the view of understanding benefits of online transactions to consumers and made the assertion that consumers will be able to enjoy the privilege of access and comparison with other brands in a way that is not obtainable from offline transaction. For instance, consumers will be able to compare prices and product qualities through classified and auction websites such as Ebay and Amazon, thus having the right and vast information to make decisions with respect to what brand and at what price to purchase. Thus, searching and negotiating on deals have been made more effective with online banking (Bakos, 1991; Malone et al., 1989, Peters, 1998). Necessary information on pricing and returns are also gathered easily with respect to online transaction (Birch and Young, 1997).

Chan (2001) also made the identification that consumers will be able to save cost from travelling to the branch and other intangible factors in the area of avoiding aggravation of traffic jams and long queues that are some of the disadvantages of conventional transaction process. In terms of time saving, the researcher hinted at auto-fill as reducing time even more by automatically filling forms based on information provided by consumers in the past. Birch and Young (1997) continued with such benefits by stating that consumers will be able to conduct their transaction at much ease as they will not be subjected to high-pressure and sales person influence that are commonly noticed in conventional transaction process.

Clearly, the above discussions have made known that a number of benefits emerge from the adoption of online transaction. Such benefits are reflected o increased convenience, effective transaction process, speedy delivery, unique output process, easier access and comparison between brands, and cost saving measures. Thus, it can be concluded based on the above discussions that online transactions have numerous benefits to consumers.

2.4. Background of Internet Banking

In the course of the past three decades, there have been a witnessed increase in the proliferation of new information and communication technologies in the financial industry, and this has had a great impact on the way that bank’s now run businesses with their customers. With particular references is the self-service technologies that have now enabled banks to cut down on employment expenses as customers are being forced to do certain things themselves; but the most important influence it has had will come in the form of how it has helped banks to pursue electronically mediated multi-channel strategy (N.J. Black et al., 2002). From the view point of the customers, these new technologies provide a form of new access to data, analysis and decision-making tool that is currently seen as one of the financial management approaches helping customers across the world (Hoehle and Huff, 2009; Lee, 2009; Luo et al., 2010).

The 1970s witnessed the first service technology in the finance (Railton, 1985) section with the emergence of automated teller machines (ATMs) (Dabholkar, 1996) in the banking industry, and this machine allows customers to withdraw or deposit money without going to the bank teller, allowing for a 24/7 banking services. This was followed by the emergence of telephone banking services in the 1980s (Ahmad and Buttle, 2002), the following by emergence of internet, which allows banks to further extend their existing channels into a web-based form of distribution channel by offering banking applications online (Bhattacherjee 2001a,b; Suh and Han, 2002; Tan and Thompson, 2000). In the course of the past decade, the emergence and high adoption of mobile technologies such as mobile phones, PDAs, and smart phones have also served as a form of strong encouragement for bank to provide mobile banking application (Barnes and Corbitt, 2003; Laukkanen and Lauronen, 2005; Scornavacca et al., 2006) that now further extends the self-service features down to home based services allowing customers to transact their bank related activities directly from their homes without having to log into an internet.

In any case, the rates of adoption for these technologies have laid down suggestions that banks are even missing the opportunities of moving even more customers to adopt electronic banking channels (DB research, 2009). Research have also showed that while 73% of European banking customers make use of the ATM per month, only 30% of the same customers actually adopt the internet banking services (DB research, 2009; Deutsche Bank research, 2010, 2011). From a similar research, it was also found that most North American and Australian retail banks offer telephone banking and mobile services, but only 5-10% of the customers make use of these services (Forrester Research, 2009).

The idea of moving clients to the e-channels is very important because of the banking that the banking industry now regard it as a process of reducing operational costs (DB research, 2009; Deutsche Bank research, 2010, 2011)). As an example, it was shown that E*TRADE’s implementation of telephone banking has been the main reason for an estimated cost saving of US$ 30 million per annum (Deutsche Bank research, 2010). Additionally, the implementation of e-banking channels help financial institutions for the purpose of selling their financial products and banks have been known to actively recommended and advertise financial instruments such as investment products, savings products or credit products through these e-banking channels (Deutsche Bank research, 2011).

The benefits of electronic banking channels on the view of the customers is that it serves as a form of decision support system because it allows individuals to make real-time financial decisions in a convenient, independent, time saving and efficient way ((Barnes and Corbitt, 2003; Laukkanen and Lauronen, 2005; Scornavacca et al., 2006). Still on the side of the benefits to the consumers, it allows them to make the decision of which of the banking services are good for them and which of them to adopt ((Barnes and Corbitt, 2003).

2.5. Electronic banking channels and influence of its adoption in Malaysia

Basically, the main focus of this research is to understand the key factors contributing to customers’ adoption of internet banking in Kuala Lumpur, and researches have shown that there are four main electronic banking channels, with these channels then having some associated transactions and decision assisting tools. These channels include ATMs, touch-dial telephone banking, internet banking and mobile banking. On the bases of understanding shared in this study, adoption is used to refer the initial use of internet banking ((Scornavacca et al., 2006), while the sue behaviour is used to make reference to the repeated usage of electronic banking technologies ((Barnes and Corbitt, 2003). On that ground, brief definitions of these electronic channels are presented below.

2.5.1. ATM banking - is used to make reference to computerized telecommunication devices which allows the customers of financial institutions the opportunity of directly making use of a secured medium to access cash as well as their bank accounts (Bhattacherjee 2001a,b).

2.5.2. Telephone banking services - is a form of computer-based keypad response or voice recognition technologies that offers customers the opportunity of performing banking activities through the telephone (Tan and Thompson, 2000). However, there is the need to understand that the telephone voice-to-voice conversation between a consumers and a bank staff is considered to be face-to-face branch banking, not telephone banking.

2.5.3. Internet banking – on its own is considered to be a banking channel that provides consumers with the opportunity of performing a wide range of financial and non-financial services though the bank’s website Suh and Han, 2002; Tan and Thompson, 2000).

2.5.4. Mobile banking – is defined as the channel through which consumers interact with the bank via a non-voice application such as text or WAP bases banking services by making use of mobile devices like a mobile phone or personal digital assistant (PDA) (Tan and Thompson, 2000).

From the Malaysian view point, Bank Negara Malaysia (2011) presented an understanding of what electronic banking is all about, the features that comprises of such banking system in the country and the benefit to economic development. In the 2011 report, it was made known that internet banking is very important for maintaining greater economic efficiency (Bank Negara, 2011). The payment system available in any country is very critical component of the economic and financial infrastructure of the country, and this is because it has a very important role to play in facilitating how money is circulated in the economy, which enhances how trade, commerce and other economic activities are conducted (Bank Negara, 2011). The presence of a system that aids an efficient way of moving funds is as such regarded to be highly important for financial development and the growth of that particular economy.

The adoption of internet banking, which is capable of offering a more expedient, secure, and cost-effective means of conducting financial transaction has been regarded as one of the strategic tool for achieving a greater economic efficiency, productivity and growth with consideration of the fact that Malaysia is transitioning towards a higher value-added, high income economy (Bank Negara, 2011). The benefits as also noted by Bank Negara (2011) is that it allows the businesses and society at large to enjoy a greater level of convenience and higher efficiency in terms of their operation from the expedient payment and the receipt of funds directly online without having to pass through the offline queuing up. This operation plays a contributory role towards the improvement of the level of competitiveness of the economy and an increase in the quality of lives of the citizens (Bank Negara, 2011). In the same report, it was also made known that the benefits derived from migrating to e-payment are not only limited to financial efficiency gains but also has a huge impact on building an eco-friendly environment.

In recent decades, the efforts of bank which are supported by an increase in technology development and innovation have been the power point driving the transformation of e-payments towards offering a better products and services. Banks have been the major drivers towards the adoption of e-payments and they have well-coordinated efforts in Malaysia that are geared towards achieving these agenda (Bank Negara, 2011). The government have also come up with supports by providing the needed infrastructures and subsidizing information and communication technologies in order to offer easier room for the penetration of internet banking in the country.

Figure 2.1: E-payment transaction per capita in Malaysia (2000-2020 projected)

Source as adapted from: Bank Negara Malaysia (2011)

From the above figure, it can be seen that there have been a high level of the penetration of internet banking as a measure of per capita payment in Malaysia and this penetration is expected to continue its high surge towards meeting the 2020 goals of transforming Malaysia into an advanced economy. The importance of such figure can be reflected in the understanding laid down by Bank Negara Malaysia (2011) in which it was stated that the adoption of internet banking is very beneficial for both the banks and society by reducing the expenses for banks and increasing financial security for the society.

Figure 2.2: E-Payment transaction per capita in 2010 (Malaysia-vs-The World)

Source as adapted from: Bank Negara Malaysia (2011)

Considering the fact that the adoption of internet banking in Malaysia has been shown to be on the rise based on the above figure 2.1, it becomes important to understand how the country is performing with respect to other countries in the world. The indication above shows that Malaysia is not really performing well when compared to the rest of the world as it can be seen that it is only better than Thailand from the above figure 2.2. In comparison with Finland, Australia, UK and New Zealand, the country is quite far from the average performance, but it’s in close line with Italy, which is an indication that it can be compared with rest of the western worlds. In any case, the projection seen in figure 2.1 clearly shows that the country will soon be in par with the top performers as it is projected to continue growing in coming years.

Bank Negara Malaysia (2011) supports the above claims by noting that there have been an encouraging growth in e-payment in the country and the growth has been notable in all the e-payment methods. The adoption of e-payment by customers was noted to have doubled from 22 in 2005 to 44 in 2010, and this have been supported by an increased growth in the use of debit cards that also increased by 8.2 times, interbank GIRO by 4.5 times and internet banking by 6.3 times (Bank Negara Malaysia, 2011).

Stating the aim of Malaysian banks, it was made known that the major aim in the next 10 years is to increase the volume of e-payment transaction per capital from its current position at 44 to 200 by 2020 as part of the 2020 goal of transforming Malaysia into an advanced economy, and this will put the country in par with most of the developed nations (Bank Negara Malaysia, 2011). This is part of the vision of making e-payment the most preferred payment medium for economic transactions in the country. It was also made known that this vision will be achieved by creating a vibrant and conducive environment that will provide the right platform for increased usage and adoption of e-payment for products and services (Bank Negara Malaysia, 2011). This will call in the need for new and bold measures, and the commitment by all stakeholders to transform the Malaysian payment system into an efficient system that is capable of delivery speed, security, convenience and reduced costs (Bank Negara Malaysia, 2011).

The impact of internet banking and e-payment platform on Malaysian consumers in Kuala Lumpur and the country at large has been very significant and the impact comes in the form of increased financial security, increase transaction convenience, increased on-time and speed delivery, reduction in banking expenses as lesser staffs are needed when compared with the conventional transaction method, and reduced negative influence on the environment as lesser natural resources are used in the transaction process. The figure 2.3 is a case of how it has reduced the level of cheques in the country and it can be seen that the reduction is very significant.

Figure 2.3: Number of cheques issued in Malaysia

Source as adapted from: Bank Negara Malaysia (2011)

From the above figure 2.3, it can be seen that the issuance of cheques have dramatically reduced since the integration of e-banking and e-payment options in the Malaysian economy, and this reduction is expected to continue even higher till 2020, which is also a reflection of the county’s 2020 development goals. So what are the benefits? They are a lot of benefits in form of reduce expenses on the side of the bank as they don’t need more staffs to handle the cheques, they won’t incur higher expenses to produce the cheques and the cases of lost, fraudulent or bounced cheques are also eliminated. On the side of the consumers, it has increased financial security and speedy as well as convenience delivery.

2.6. Theories surrounding adoption of new technologies

A number of competing theoretical approaches have been adopted for the purpose of investigating the factors that determine the level of acceptance for new information technologies (Venkatesh et al., 2003). In this line of study, the main focus has been on the individual acceptance of new technologies, which is done by testing their behavioural intention (their intention towards the adoption of new technologies) or behaviour on its own (the actual adoption of new technology) as the depending variable from which the desires are created (Davis, 1989; Taylor and Todd, 1995). The theoretical models are based on the Theory of Reasoned Action (TRA) (Fishbein and Ajzen, 1975) and on the Theory of Planned Behaviour (TPB) (Ajzen, 1985). Thus, it is important that that these theories be discussed and that is the main purpose of this section.

2.6.1. Theory of Reasoned Action (TRA)

The Theory of Reasoned Action (TRA) was developed by Fishbein and Ajzen (1975), and it has been described as one of the most influential theories in terms of theories that can e used to explain how human behave (Venkatesh et al., 2003). Basically, the notion of understanding presented by the theory is that the behavioural intention of people can be linked to their attitude towards the behaviour and the subjective norms that govern such behaviours. The attitude that people exercise towards behaviour is described as the individual’s positive or negative feeling that they show about performing the target behaviour (Fishbein and Ajzen, 1975, p. 216). On the other hand, subjective norms refer to the perception that most of the people who are really important to the individual think of the individual’s action as to where it should have been or should not have been performed – which is a direct question of the behaviour (Fishbein and Ajzen, 1975, p.302).

2.6.2. Technology acceptance model (TAM)

The technology acceptance model (TAM) is a model proposed by Davis (9189) which is used for the purpose of predicting the acceptance and use of new information and communication technologies within a given organization. This model was derived from the TRA and its final version is more of a parsimonious concept. The behavioural intention in this model can be explained by the attitude of people towards the use of the system in terms of its perceived usefulness. The attitude towards the use of the given system can in turn be explained by both its perceived usefulness and how easy it is to be used.

2.6.3. Theory of Planned Behaviour (TPB)

The Theory or Planned Behaviour (TPB) was developed by Ajzen (1985) as a proposed extension of the TRA to cover situations in which the people in discussion don’t have complete control of their behaviour. On a basic understanding, TPB is an added determinant to the behavioural intention and people’s attitude towards the behaviour constructs, which is the perceived behavioural control. The construct is used to reflect on how people view things with respect to internal and external limitations of their behaviour. On a very formal term, it is used as a reflection of how people perceive that a given behaviour will be easy or difficult to perform (Ajzen, 1985).

In TPB, behaviour on its own is viewed as a function of both the perceived behavioural control and the behavioural intention. From a different angle, the behavioural intention is influenced by the attitude of people towards behaviour, the subjective norm and the perceived behavioural control; the determinants of the intention on the same hand are built by the underlying structures of the beliefs.

From the above discussions, a definitive understanding can be gained from the discussion as to the fact that that the willingness of an individual to adopt e-banking services is heavily influenced by the perceived benefit and how people will judge such behaviour. This implies that when people view e-baking to be a right action, more people will be likely to adopt it as it will change into a social norm following adoption by different people in the society. On the same hand, it was gained through the review that while it can easily be converted into a social norm, some people will adopt internet banking unconsciously – as not being geared by their own perception or desires, but highly influenced their unconsciousness in the environment they live in.

2.7. Key factors for adoption of internet banking: Malaysian consumers’ perception

Davis (1989) make the finding that the overall attitude of an individual towards adoption of any given information technology (IT) and its applications is pivotal towards determining whether or not the individual will be willing to make use of the system. On the same ground, the attitude of an individual towards the use of that particular technology is highly influences by the perceived ease-of-use of that particular IT application. Abrazhevich (2001) added support to the above theory in another study where it was made known that a user’s perception of e-payment has a significant role to play in the users’ willingness to accept such system, which will also be highly depending on the user’s attitude. Another statement made by Eastin (2002) offers a further supporting by stating that the initial adoption of IT will have an identifiable impact as a result of the fact that consumers will normally adopt new services only when they have experienced a similar service in the past. The basic understanding is that attitude plays the most influential role on consumers’ adoption of internet banking and e-payment option, but the attitude of these consumers are influenced by a number of factors and these factors are as discussed below.

2.7.1. Perceived benefits

Benefit was identified by Chou et al. (2004) as a significant driver of consumers’ acceptance and adoption of e-payment options. On a similar study, it was made known by Eastin (2002) who conducted a study on four e-commerce activities (online shopping, banking, investing, and e-payment systems) that before ay adoption, the perceived convenience and financial benefits predicts the decision of consumers to adopt the service. Gerrard and Cunningham (2003) also view perceived economic benefit as being comprised of fixed and transaction costs that is associated with the adoption of e-payment option in which the fixed cost are used to refer to the cost of installing the payment equipment like the card readers and payment software; while the transaction cost are those cost incurred by customers and merchants every time they carry out a given business transaction (Chou et al., 2004). Basically, the gained understanding is that consumers are more likely to adopt e-payment options if they view it as having higher benefits than the conventional method (Gerrard and Cunninghamm, 2003; San-Martin et al, 2012; San-Martin et al, 2013).

Wendy et al. (2013) made known that the statistics of e-payment adoption in Malaysia clearly shows that the perception of the system by Malaysians is slowly changing from making use of cash to e-pay as a result of a number of reasons. For instance, the high rate of convenience offered by credit card is a reflection of how attractive it is as a payment option and the Malaysian consumers perceive the convenience it has to offer, as well as the potential for business growth based on instantaneous transaction and these features are the main reason behind its increased adoption in the Malaysian setting.

2.7.2. Perceived usefulness

Davis (1989) defined perceive usefulness as the degree at which an individual believes that making use of a given system will help improve his or her job performance (p.320). By hypotheses, it was made known that intention to adopt internet banking feature will depend heavily on how individuals can link it to increase in their overall performance. This is the degree at which it will allow them to serve customers on-point, on-time and without causing any hindrance on the potential of the individual to take advantage of any opportunity arising at any given point in time.

2.7.3. Perceived trust

Trust has been defined as a measure of the degree of risk that is involved in a given financial transaction, and the outcome of trust is a reduction in the perceived risk, which will lead to positive intention of the consumers’ towards the adoption of e-payment (Yousafzai et al., 2003). Even before then, it has also been found by studies that trust is a significant determinant that influences consumers’ willingness to conduct e-commerce transaction and engage in online exchange and transfer of money (Friedman et al., 2000; Gefen, 2000; 2003; Hoffman et al., 1999; Jarvenpaa et al., 2000; Wang et al., 2003). Trust is also a catalyst for buyer-seller transaction as it offers the buyer a high expectation of satisfying exchange relationship (Peha and Khamitov, 2004). On that ground, it is believed by numerous researches that trust is important for understanding the interpersonal behaviour and economic exchange effects of consumers’ perception towards e-payment systems (Abrazhevich, 2001; Chou et al., 2004; Tsiakis and Sthephanides, 2005) and subsequently its adoption success (Chau and Poon, 2003; Kniberg, 2002; Liao and Wong, 2004; Lim et al., 2006). On that ground, it can be stated that trust plays significant role with respect to the willingness of Kuala Lumpur consumers’ to adopt e-payment options.

2.7.4. Level of Self-efficacy

Bandura (1986) noted that self-efficacy on its own is derived by the level of experience of an individual’s mastery. The beliefs of self-efficacy are developed as response to four sources of information. These information are success or failure of previous experience; vicarious experience gathered from observing other people’s success or failure; verbal persuasion from peers, colleagues and relatives; and affective state of an individual’s emotional arousal such as anxiety.

In support of the above argument, a number of studies have found that self-efficacy has a significant positive influence on the perception and behavioural intention of an individual to adopt information systems (IS) (Hill et al., 1986, 1987; Luarn and Lin, 2005). This is based on the understanding that users with high self-efficacy sill on that same ground, it has been found by studies that users with high level of self-efficacy seem to experienced more media and communication tools, while those with lower level of self-efficacy seem to be confined to fewer options (Burton-Jones and Hubona, 2006; Li et al., 2011). As such, it can be stated that a higher level of self-efficacy will influence and individual’s chances of adopting e-payment option because they will have a higher level of confidence within them and will be more willing to try new technologies.

2.7.5. Ease of use

There are numerous studies with the view that a technology will more likely be used if it is perceived as being easier to use (Legris et al., 2003; Venkatesh and Davis, 2000; Wang and Li, 2011). Flavian and Guinaliu (2006) also pointed out that the ease of use of any computing system has a negative influence on the trust. This is based on the understanding that consumers will be more likely to take full control of issues that will arise from the usage if the system is easier to use. Additionally, the greater reveal of usability of a system will favour minor searching costs (Bakos, 1997) and this is the understanding that Guriting and Ndubisi (2006) based their research to discover that when Malaysian users view as system as being easy to use, it will have a significant positive influence on their behavioural intentions to adopt online banking services and hence e-payment in the Malaysian market.

2.7.6. Perceived level of security

On a general ground, security is seen as the set of procedures and program used by a system for the purpose of verifying the information and sources in order to guarantee the privacy and integrity of the information (Tsiakis and Sthephanides, 2005). The level of security offered is definitely on the high note with respect to Malaysian consumers’ adoption of internet banking and e-payment features as they are very conscious of their hard earned revenues. On that ground, the higher the level of security offered by the e-banking feature, the higher the potential of customers to adopt it (Tsiakis and Sthephanides, 2005).

2.8. Research Model

5 elements proposed in this research: - Online Retailer Trustworthy (Independent), Risk Concern (Independent), Privacy concern (Independent), Internet Security Concern (Independent), and Adoption on online transaction (Dependant).

Figure 2.4: research model

Source refers to research model and amended from Critical Success Factors for Adoption of e-Banking in Malaysia. (MMU University)

2.9 Research Hypothesis

Based on the above framework, the hypothesis for this research are as stated below and they serve as the foundation for the primary research.

H1: Relationship among adoption on online transaction is related to Internet Security Concern.

H2: Relationship among adoption on online transaction is related to Risk Concern.

H3: Relationship among adoption on online transaction is related to Privacy Concern.

H4: Relationship among adoption on online transaction is related to online retailer Trustworthy.

CHAPTER 3

RESEARCH METHODOLOGY

3.1. Chapter introduction

There is a common understanding and generally conceived term that falling to plan is planning to fail. Thus, in any given research, there is need to have a clear plan of what is to be done and how it will be done. This is the main purpose that methodology does play in primary research. This, this section of the research is designed to present a clear outline of how the whole primary research process was conducted.

3.2. Questionnaire design

A total of 20 questions were loaded into the questionnaire with each of the independent variable attributed to 5 questions. The questionnaire design was based on a 5-point likert’s rating scale in which responders where to choose between 1 (totally disagreeing) to 5 (totally agreeing) with any given question and 3 is the neutral answer which is the point where a respondent neither agree nor disagree with the statement. The questionnaire comprised of two major sections. The first section is the bio-data section in which information relating to respondents demographics where gathered and the gathered demographics include: age, gender, income, employment, education, bank used, and years of experience with a banking service. The second section is the questionnaire section in which respondents addressed the 20 questions loaded in the questionnaire. The basic criterion for participating in this research is that respondent must be making used of a banking service. A total of 200 responses where gathered and analyzed.

3.3. Data collection

Considering that the purpose of the research is to understand factors that influence consumers’ adoption of e-banking in Malaysia where Malaysia as a whole represents the target group. Thus, it was deemed important to ensure that all Malaysians meeting set criterion for participation are provided with equal opportunity to participate in the research. However, this is extremely difficult because of the large landmass of the country. As such, online survey was chosen as the right survey platform because it will provide the needed equality for participating in the research. Additionally, online survey was also chosen because of the research topic which clearly reflects a consumers’ ability to make use of internet and other electronic devices. The survey was hosted on www.freesurveyonline.com and advertised through Google and Facebook. The advanced advertisement network of both Facebook and Google meant that users can easily be targeted based on countries, and Malaysian users where targeted bed on that means.

3.4. Measurement

In order to ensure that the variables loaded into this research are easily measurable, the following components made up intern banking framework as: access to account, control of the account and account usage based on adoption from Qureshi et al. (2008) and all elements where measured with 5-points likert’s rating scape as noted agree. Consumers’ adoption was measured based on four items as: awareness, interest, evaluation and usages based on the adoption from Michael (2007), while consumers’ satisfaction level with e-banking services was measured on level of commitment, loyalty, retention and recommendation of such services (Ndubisi and Sinti, 2006; Raman et al., 2008).

3.5. Validity

Validity is defined by Hair et al. (2007: 8) as the extent to which a measure can accurately be used as a representation of what is meant to do, and this make validity a very important concern in defined research measure. As noted by Fujun et al. (2007), there are three kinds of validity: content validity, construct validity, and predictive validity. Content validity was defined by Duggirala et al. (2008) as the assessment of how individual items corresponds with concepts. Content validity was adopted in this research through the review of literatures that shade light on factors affecting adoption of internet banking, and gained understanding from this literature was used in loading primary variable. Additionally, predictive validity was also used as shown in chapter 4, and the predictive validity used in this case is cronbach’s alpha.

3.6. Reliability

Reliability is an indication of how a variable or sets of variables is in line with what it is meant to measure (Hair et al., 2007). It is different from validity because it is not related with what is being measured but instead is related to how such item is being measured. This research adopted different items in its numerous constructs, which means that internal consistency was applied as the right approach for this study. As noted by Hair et al. (2007), the rational for internal consistency is that individual items should be measured with the same construct that was used in the study and this is applicable in this research. Fujun et al. (2007) made known that the Cronbach analysis with a value of 0.70 clearly demonstrated internal consistency of data the value in this research can be considered consistent because the obtainable value is in line with such figure.

3.7. Limitations of data gathering method

A number of researches have been done in the area of understanding factors limiting online survey (for example, Fricker and Schonlau, 2002; Furrer and Sudharshan, 2001; Ilieva et al., 2002; Malhotra, 2004; McDaniel and Gates, 2005; Tingling et al., 2003; Wilson and Laskey, 2003), and findings from these research point out to a number of issues which are also considered limitations to this research as:

3.7.1. Skewed attributes of the internet population – a number of studies have been conducted in the area of understanding how the internet actually represents the real world (for example, Fricker and Schonlau, 2002; Grossnickle and Raskin, 2001; Miller, 2001; Ray and Tabor, 2003; Wilson and Laskey, 2003) with finding from such studies being that that internet cannot be used as a representation of the real world. This is because, internet is still limited to only those that can afford to have it, have the chance to use it, and are making use of it when surveys are being conducted online. However, Fricker and Schonlau (2002) presented an argument against such idea stating that the internet can be viewed as a representation of the real population because these issues can also occur in conventional researches. For instance, offline researches are also limited to respondents available at the time of the research.

3.7.2. Respondents lack of online expertise – research findings indicate that the internet is made up of users who have not used the internet for a couple of months (Greenspan, 2003), which limits their overall expertise with internet features. This issue was limited by designing an easy to access webpage for respondents to participate easily.

CHAPTER 4

RESULTS AND ANALYSIS

4.1. Introduction

In this chapter, he main purpose if to present an analysis of the findings from the primary research. The analysis will be based on both demographic and questionnaire variable loaded with descriptive, frequency, regression, ANOVA, t-Test and other statistical analysis presented in the view of proving stated hypotheses.

4.2. Reliability test

Table 4.1: Case Processing Summary
		N	%
Cases	Valid	200	100.0
	Excluded^a	0	.0
	Total	200	100.0
a. Listwise deletion based on all variables in the procedure.

Table 4.2: Reliability Statistics
Cronbach's Alpha	N of Items
.750	29

Earlier in the chapter 3, the views of Fujun et al. (2007) as the guiding principle of reliability testing was presented and it was made known in this chapter that for a data to be considered reliable, it must have a value set of at least 0.70. As can be seen above, the crombach alpha value of the data used in this research has a value bigger than 0.70, which makes it highly reliable.

4.3. Demographic variables

4.3.1. Race of respondents

Table 4.3: What is your race?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	malay	73	36.5	36.5	36.5
	chinese	47	23.5	23.5	60.0
	indian	37	18.5	18.5	78.5
	other local race	28	14.0	14.0	92.5
	foriegner	15	7.5	7.5	100.0
	Total	200	100.0	100.0

Understanding the race of respondent is very important because it can be used as a measure of the most affected race as well as studying the influence of culture on respondents’ choices. The above analysis shows that Malays are the most populous race in terms of volume of response with 36.5% of the total response, followed by Chinese with 23.5%, Indians at 18.5%, other Malaysian races at 14% and the least being foreigners with just 7.5%. In essence, this finding is very significant because it clearly represents all races in Malaysia (at least to the minute level), making the overall research process more valid because the findings can be applied to all races in Malaysia.

4.3.2. Gender of respondents

Table 4.4: What is your gender
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	male	123	61.5	61.5	61.5
	female	77	38.5	38.5	100.0
	Total	200	100.0	100.0

Majority of the respondents are men with 61.5% of the total population, while women represents 38.5% of the total population. There is a clear gap in terms of gender, but all genders are well represents, which implies that findings from the research can be applied to both genders.

4.3.3 Age of respondents

Table 4.5: How old are you?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	18-20 yers	15	7.5	7.5	7.5
	21-30 years	74	37.0	37.0	44.5
	31-40 years	90	45.0	45.0	89.5
	41-50 years	12	6.0	6.0	95.5
	51-60 years	9	4.5	4.5	100.0
	Total	200	100.0	100.0

Age is a very important variable in this research because it can determine consumers’ level of experience with the banking system and adoption of e-banking services. The findings indicates that majority of the respondents are aged 31-40 years (45%) followed by those aged 21-20 years (37%), 18-20 years (7.5%), 41-50 years (6%), and 51-60 years (4.5%). While there are disparities in terms of the age group representation, the most significant indication here is that all age groups are well represented. Thus, it can be said that findings from this research can be applied to all age groups.

4.3.4. Educational level of respondents

Table 4.5: What is your educational level
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	not educated	3	1.5	1.5	1.5
	high school	33	16.5	16.5	18.0
	diploma	50	25.0	25.0	43.0
	degree	68	34.0	34.0	77.0
	masters	27	13.5	13.5	90.5
	PhD	19	9.5	9.5	100.0
	Total	200	100.0	100.0

Educational level is very significant because it can be used as a measure of respondents’ cognitive abilities. Only 1.5% of the respondents are not educated, which means that majority of the respondents have gained needed cognitive competence for addressing the questions that are set in this research. Such an understanding further validates the overall quality of gathered data.

4.3.5: Respondents’ years of experience with banking service

Table 4.6: How many years have you been using banking services?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	1-3 years	44	22.0	22.0	22.0
	4-6 years	103	51.5	51.5	73.5
	7-10 years	37	18.5	18.5	92.0
	above 10 years	16	8.0	8.0	100.0
	Total	200	100.0	100.0

The effect of years of experience in this case is the fact that the longer a customers must have been using a banking service, the better the customers is positioned to rate such service. 51% of the respondents have been making use of the banking service for 4-6 years, followed by 22% at 1-3 years, 18% for 7-10 years and 8% for more than 10 years. Considering that 78% of the total respondents have been making use of banking services for more than 3 years, it can be stated that their years of experience further improves the quality of this research because they are well positioned to address the research.

4.3.6 Familiarity and usage of e-banking services

Table 4.7: Are you familiar with any e-banking services offered by your bank?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	yes	200	100.0	100.0	100.0

Table 4.8: Have you made use of /are you currently making use any e-banking service?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	yes	200	100.0	100.0	100.0

The above tables 4.7 and 4.8 showcases a perfect response in the sense that all respondents agree to be familiar with at least one of the e-banking services offered by their banks and also make use of at least one of such services. This is positive for findings to be generated from this research because it implies that respondents will be answering based on actual experience.

4.3.7 E-banking services used and years of usage

Table 4.9: If yes, what is the e-banking service you are making use of?
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	atm	89	44.5	44.5	44.5
	internet banking	7	3.5	3.5	48.0
	pos	17	8.5	8.5	56.5
	phone banking	11	5.5	5.5	62.0
	none of the above	76	38.0	38.0	100.0
	Total	200	100.0	100.0

Table 4.10: How many years have you been making use of e-banking services
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	1-3 years	72	36.0	36.0	36.0
	4-6 years	90	45.0	45.0	81.0
	7-10 years	27	13.5	13.5	94.5
	above 10 years	11	5.5	5.5	100.0
	Total	200	100.0	100.0

Respondents make use of different e-banking services and they have been making use of such for years as the tables 4.9 and 4.10 shows respectively. Thus, all demographic variables loaded in this research have returned positive influence on the quality of research because the data has been affected positively from respondents’ level of experience and usage of e-banking services across different banks and sectors in Malaysia.

4.4. Descriptive statistics of variables

Table 4.11:Descriptive Statistics
	N	Minimum	Maximum	Mean	Std. Deviation	Kurtosis
	Statistic	Statistic	Statistic	Statistic	Statistic	Statistic	Std. Error
I think e-banking is secured	200	1.00	5.00	4.0900	.96257	2.121	.342
I think e-banking is convenient	200	1.00	5.00	4.2400	.99365	2.664	.342
I think e-banking is effective and efficient	200	2.00	5.00	4.4950	.68727	3.648	.342
I think e-banking is easy to use	200	1.00	5.00	3.9800	1.19446	.640	.342
I think e-banking has lower risk	200	1.00	5.00	4.0900	1.04275	1.206	.342
I make use of e-banking because I feel secured with my banks’ facilities	200	1.00	5.00	3.9750	1.28945	.440	.342
I make use of internet banking because I fell lower risk with my bank’s services	200	2.00	5.00	4.2600	1.01368	.147	.342
I make use of internet banking because it offer me higher privacy	200	1.00	5.00	4.1700	.98282	2.749	.342
I make use of internet banking because it’s convenient	200	1.00	5.00	4.3100	1.01442	4.228	.342
I make use of e-banking because I trust my banks facilities	200	1.00	5.00	4.2000	1.21961	1.220	.342
I make use of internet banking because I find it easy to use	200	1.00	5.00	4.2900	1.07315	2.053	.342
I think security should be improved in e-banking	200	1.00	5.00	4.0350	.96354	2.308	.342
I think privacy should be improved in e-banking	200	1.00	5.00	4.2100	1.13239	2.804	.342
I think risk should be reduced in e-banking	200	1.00	5.00	4.0650	1.26442	.297	.342
I will make use of e-banking services more if it offers higher security measure	200	1.00	5.00	4.2200	1.08512	1.821	.342
I will make use of e-banking more if it offers higher privacy	200	1.00	5.00	4.0950	1.03990	2.097	.342
I will make use of e-banking more if it offers lower risk	200	1.00	5.00	4.3100	.93179	4.029	.342
I will make use of e-banking more if it is made easier to use	200	1.00	5.00	4.1800	1.22273	1.084	.342
I think e-banking is the future of banking	200	1.00	5.00	4.2100	1.13682	1.249	.342
I think e-banking will replace conventional banking entirely in the nearest future.	200	1.00	5.00	4.0300	1.11143	1.695	.342
Valid N (listwise)	200

A total of 20 questions were loaded into this research and the descriptive analysis of these questions are as presented above. The table 4.11 shows that all the loaded variables have at least 3.9 value of means and 0.68 value of standard deviation. Considering that the rating scale is 5-points likert’s in which 1 = totally disagree and 5 = totally agree with 3 being neutral, it can be seen that all loaded variable have an influence on consumers’ decision to adopt e-banking services, remain loyal to such adoption and see e-banking as the future of banking in Malaysia. On a more general note, this validates all stated hypotheses in the sense that the strong the positive outcome from such hypotheses, the higher consumers’ decision and choice to adopt e-banking services. This will further be validated below.

4.5 Correlation to independent variables

Table 4.12: Correlations of independent variables
		I think e-banking is secured	I think e-banking is convenient	I think e-banking is effective and efficient	I think e-banking is easy to use	I think e-banking has lower risk
I think e-banking is secured	Pearson Correlation	1	.713^**	.654^**	.736^**	.843^**
	Sig. (1-tailed)		.000	.000	.000	.000
	N	200	200	200	200	200
I think e-banking is convenient	Pearson Correlation	.713^**	1	.863^**	.694^**	.857^**
	Sig. (1-tailed)	.000		.000	.000	.000
	N	200	200	200	200	200
I think e-banking is effective and efficient	Pearson Correlation	.654^**	.863^**	1	.679^**	.835^**
	Sig. (1-tailed)	.000	.000		.000	.000
	N	200	200	200	200	200
I think e-banking is easy to use	Pearson Correlation	.736^**	.694^**	.679^**	1	.873^**
	Sig. (1-tailed)	.000	.000	.000		.000
	N	200	200	200	200	200
I think e-banking has lower risk	Pearson Correlation	.843^**	.857^**	.835^**	.873^**	1
	Sig. (1-tailed)	.000	.000	.000	.000
	N	200	200	200	200	200
**. Correlation is significant at the 0.01 level (1-tailed).

The above table shows that all the independent variables are correlated. This implies that consumers’ perception of one variable (e.g. security features of e-banking services) will influence perception of another variable (e.g. privacy features). In essence, consumers needs all these variables to be perfectly aligned in order for them to effectively influence the independent variable (e-banking services adoption rate of consumers).

4.6. Correlation of between dependent variables and demographics variables

Table 4.13: Correlations between independent variables and demographics
		I think e-banking is secured	I think e-banking is convenient	I think e-banking is effective and efficient	I think e-banking is easy to use	I think e-banking has lower risk	What is your race?	What is your gender	How old are you?	What is your educational level	How many years have you been using banking services?
I think e-banking is secured	Pearson Correlation	1	.713^**	.654^**	.736^**	.843^**	.571^**	-.524^**	.638^**	-.789^**	.697^**
	Sig. (1-tailed)		.000	.000	.000	.000	.000	.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200	200
I think e-banking is convenient	Pearson Correlation	.713^**	1	.863^**	.694^**	.857^**	.601^**	-.700^**	.538^**	-.726^**	.569^**
	Sig. (1-tailed)	.000		.000	.000	.000	.000	.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200	200
I think e-banking is effective and efficient	Pearson Correlation	.654^**	.863^**	1	.679^**	.835^**	.680^**	-.796^**	.619^**	-.754^**	.620^**
	Sig. (1-tailed)	.000	.000		.000	.000	.000	.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200	200
I think e-banking is easy to use	Pearson Correlation	.736^**	.694^**	.679^**	1	.873^**	.700^**	-.703^**	.523^**	-.831^**	.760^**
	Sig. (1-tailed)	.000	.000	.000		.000	.000	.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200	200
I think e-banking has lower risk	Pearson Correlation	.843^**	.857^**	.835^**	.873^**	1	.731^**	-.720^**	.589^**	-.906^**	.758^**
	Sig. (1-tailed)	.000	.000	.000	.000		.000	.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200	200
What is your race?	Pearson Correlation	.571^**	.601^**	.680^**	.700^**	.731^**	1	-.777^**	.645^**	-.839^**	.760^**
	Sig. (1-tailed)	.000	.000	.000	.000	.000		.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200	200
What is your gender	Pearson Correlation	-.524^**	-.700^**	-.796^**	-.703^**	-.720^**	-.777^**	1	-.625^**	.747^**	-.654^**
	Sig. (1-tailed)	.000	.000	.000	.000	.000	.000		.000	.000	.000
	N	200	200	200	200	200	200	200	200	200	200
How old are you?	Pearson Correlation	.638^**	.538^**	.619^**	.523^**	.589^**	.645^**	-.625^**	1	-.695^**	.495^**
	Sig. (1-tailed)	.000	.000	.000	.000	.000	.000	.000		.000	.000
	N	200	200	200	200	200	200	200	200	200	200
What is your educational level	Pearson Correlation	-.789^**	-.726^**	-.754^**	-.831^**	-.906^**	-.839^**	.747^**	-.695^**	1	-.830^**
	Sig. (1-tailed)	.000	.000	.000	.000	.000	.000	.000	.000		.000
	N	200	200	200	200	200	200	200	200	200	200
How many years have you been using banking services?	Pearson Correlation	.697^**	.569^**	.620^**	.760^**	.758^**	.760^**	-.654^**	.495^**	-.830^**	1
	Sig. (1-tailed)	.000	.000	.000	.000	.000	.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200	200
**. Correlation is significant at the 0.01 level (1-tailed).

From the above analysis, three main demographics variables where found to influence the dependent variables and they are: Race, Age, and Years of experience with banking services. The understanding here is that the race of respondents influence their perception of security, privacy, convenience and risk issues with e-banking services in Malaysia; and the older a respondent is or the longer a respondent has been making use of e-banking services in Malaysia, the higher the respondents evaluation of the process, attribution of positivity and negativity to the variables and greater the chances of these variables influences their adoption rate.

4.7. Correlation between independent variable and dependent variables

Table 4.14: Correlations between independent variable and dependent variables
		I think e-banking is secured	I think e-banking is convenient	I think e-banking is effective and efficient	I think e-banking is easy to use	I think e-banking has lower risk	I will make use of e-banking services more if it offers higher security measure	I will make use of e-banking more if it offers higher privacy	I will make use of e-banking more if it offers lower risk	I will make use of e-banking more if it is made easier to use
I think e-banking is secured	Pearson Correlation	1	.713^**	.654^**	.736^**	.843^**	-.399^**	-.415^**	.518^**	-.462^**
	Sig. (1-tailed)		.000	.000	.000	.000	.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200
I think e-banking is convenient	Pearson Correlation	.713^**	1	.863^**	.694^**	.857^**	-.198^**	-.251^**	.576^**	-.334^**
	Sig. (1-tailed)	.000		.000	.000	.000	.002	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200
I think e-banking is effective and efficient	Pearson Correlation	.654^**	.863^**	1	.679^**	.835^**	-.234^**	-.432^**	.308^**	-.471^**
	Sig. (1-tailed)	.000	.000		.000	.000	.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200
I think e-banking is easy to use	Pearson Correlation	.736^**	.694^**	.679^**	1	.873^**	-.237^**	-.318^**	.164^*	-.493^**
	Sig. (1-tailed)	.000	.000	.000		.000	.000	.000	.010	.000
	N	200	200	200	200	200	200	200	200	200
I think e-banking has lower risk	Pearson Correlation	.843^**	.857^**	.835^**	.873^**	1	-.249^**	-.416^**	.385^**	-.494^**
	Sig. (1-tailed)	.000	.000	.000	.000		.000	.000	.000	.000
	N	200	200	200	200	200	200	200	200	200
I will make use of e-banking services more if it offers higher security measure	Pearson Correlation	-.399^**	-.198^**	-.234^**	-.237^**	-.249^**	1	-.068	-.013	.682^**
	Sig. (1-tailed)	.000	.002	.000	.000	.000		.171	.427	.000
	N	200	200	200	200	200	200	200	200	200
I will make use of e-banking more if it offers higher privacy	Pearson Correlation	-.415^**	-.251^**	-.432^**	-.318^**	-.416^**	-.068	1	-.046	.160^*
	Sig. (1-tailed)	.000	.000	.000	.000	.000	.171		.258	.012
	N	200	200	200	200	200	200	200	200	200
I will make use of e-banking more if it offers lower risk	Pearson Correlation	.518^**	.576^**	.308^**	.164^*	.385^**	-.013	-.046	1	.207^**
	Sig. (1-tailed)	.000	.000	.000	.010	.000	.427	.258		.002
	N	200	200	200	200	200	200	200	200	200
I will make use of e-banking more if it is made easier to use	Pearson Correlation	-.462^**	-.334^**	-.471^**	-.493^**	-.494^**	.682^**	.160^*	.207^**	1
	Sig. (1-tailed)	.000	.000	.000	.000	.000	.000	.012	.002
	N	200	200	200	200	200	200	200	200	200
**. Correlation is significant at the 0.01 level (1-tailed).
*. Correlation is significant at the 0.05 level (1-tailed).

From all the loaded variables, risk is the most correlated. It correlates with every other variable and this is a significant discovery because it is a clear implication that consumers are more worried about the risk of using e-banking services as compared with other issues. It is understanding because earlier notes from the literature review made known that the increase in information and communication technologies has increased risks emerging form the adoption of e-banking services.

4.8. ANOVA and Coefficient

Table 4.15: ANOVA^a
Model		Sum of Squares	df	Mean Square	F	Sig.
1	Regression	123.089	6	20.515	229.308	.000^b
	Residual	17.266	193	.089
	Total	140.355	199
a. Dependent Variable: How many years have you been making use of e-banking services
b. Predictors: (Constant), I make use of internet banking because I find it easy to use, I make use of internet banking because it’s convenient , I make use of internet banking because it offer me higher privacy , I make use of e-banking because I feel secured with my banks’ facilities, I make use of internet banking because I fell lower risk with my bank’s services, I make use of e-banking because I trust my banks facilities

The test of ANOVA was conducted in order to determine the extent of respondents’ age of experience with making use of e-banking influences their perception of variables loaded. With the obtained F value and Sig. value, it is clear that the longer a respondent make use of e-banking services, the higher the respondents rating of such banking system, thus validating earlier claims that age of experience determine perception of e-banking and adoption. In summary, it can be said that if a consumer has experienced positive outcomes from e-banking, their chances of loyalty, re-adoption and recommendation is increased significantly.

Table 4.16: Coefficients^a
Model		Unstandardized Coefficients		Standardized Coefficients	t	Sig.
Model		B	Std. Error	Beta	t	Sig.
1	(Constant)	4.767	.234		20.411	.000
	I make use of e-banking because I feel secured with my banks’ facilities	.183	.026	.280	7.027	.000
	I make use of internet banking because I fell lower risk with my bank’s services	.093	.041	.113	2.275	.024
	I make use of internet banking because it offer me higher privacy	-.236	.028	-.277	-8.414	.000
	I make use of internet banking because it’s convenient	-.088	.026	-.106	-3.349	.001
	I make use of e-banking because I trust my banks facilities	-.201	.035	-.292	-5.716	.000
	I make use of internet banking because I find it easy to use	-.419	.039	-.535	-10.871	.000
a. Dependent Variable: How many years have you been making use of e-banking services

Just like the ANOVA test, this coefficient of variables analyzed above shows that years of experience with e-banking services has a significant influence eon consumer’s perception of associated risks and security issues with no effect on how consumers’ perceive convenience, trust and ease of use of –banking services. It is clear as to why such is noticed because security and risks are better understood with advancement in age as the respondents must have been engaged in numerous activities that shaped how they see risk and security. However, factors such as convenience and ease of use is not influenced by age because every customers wants the e-banking features to be easy to use as well as convenient.

4.9. Proof of hypotheses

HP1: Security of e-banking services influences consumers’ decision to adopt e-banking.

Table 4.17: I make use of e-banking because I feel secured with my banks’ facilities
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	1.00	20	10.0	10.0	10.0
	2.00	12	6.0	6.0	16.0
	3.00	12	6.0	6.0	22.0
	4.00	65	32.5	32.5	54.5
	5.00	91	45.5	45.5	100.0
	Total	200	100.0	100.0

The above analysis shows that customers general concur with such understanding because 78% of the total respondent agree to that. Thus, the first hypotheses has been proven to be true in the sense that is e-banking facilities are viewed to be secured, customers will make use of it and if they are view to be less secured, customers will likely not adopt e-banking services in Malaysia.

HP2: Risk of e-banking services influences consumers’ decision to adopt e-banking.

4.18: I make use of internet banking because I fell lower risk with my bank’s services
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	2.00	22	11.0	11.0	11.0
	3.00	17	8.5	8.5	19.5
	4.00	48	24.0	24.0	43.5
	5.00	113	56.5	56.5	100.0
	Total	200	100.0	100.0

The second hypothese made known that the more risk e-banking services are, the less intention to adopt from customers and vice versa. 80.5% of the total respondents agree to that, further validating such hypotheses.

HP3: Privacy of e-banking services influences consumers’ decision to adopt e-banking.

Table 4.19: I make use of internet banking because it offer me higher privacy
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	1.00	8	4.0	4.0	4.0
	2.00	8	4.0	4.0	8.0
	3.00	10	5.0	5.0	13.0
	4.00	90	45.0	45.0	58.0
	5.00	84	42.0	42.0	100.0
	Total	200	100.0	100.0

Just like the two hypotheses discussed earlier, 87% of respondents agree that the privacy provided by e-banking service features will influence their overall adoption of such features. This influences comes in the form of the higher the provided privacy, the higher the level of adoption.

HP4: built trust on e-banking services influences consumers’ decision to adopt e-banking.

Table 4.20: I make use of e-banking because I trust my banks facilities
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	1.00	14	7.0	7.0	7.0
	2.00	12	6.0	6.0	13.0
	3.00	12	6.0	6.0	19.0
	4.00	44	22.0	22.0	41.0
	5.00	118	59.0	59.0	100.0
	Total	200	100.0	100.0

The final variable loaded in the hypotheses is trust and it can be seen that 81% of total respondents agree that they higher they trust the e-banking services of their banks, the greater their chances for adopting e-banking services. Thus, it has been proved that all the four hypotheses loaded in this study does influence consumers’ decision to adopt e-banking services. Besides these four variables others variables found to have influence include ease of use, convenience, and associated cost of making use for such services.

4.10. Summary of findings

With success on understanding factors that influence consumers’ adoption of e-banking services already measured, it can be further highlighted that in the Malaysian setting, such factors include customers’ perceived trust, security features, risk, privacy, convenience, and ease of use with the e-banking service features.

CHAPTER 5

CONCLUSION AND RECOMMENDATION

5.1. Summary

Right from the onset of this research, a clear purpose was communicated from the research title and the purpose is to understand factors that influence consumers’ adoption of e-banking services in Malaysia. The task to achieve this purpose was set off with an introduction, which defined what is to be done and how it will be done. A background review showed that e-banking is the new way to bank because it is faster, efficient, effective and convenient. Both bankers and consumers benefits from the advantages of e-banking. However, shifting from what consumers are used to (conventional banking method) to a new approach (e-banking) will not be easy because of the huge difference in terms of operation, process and application. In order to effectively transit from conventional to e-banking, consumers needed to have necessary skills to operate the electronic devices used in this new banking platform as well as have these devices at their disposal. Thus, the decision to understand factors that influence consumers’ adoption rate was deemed necessary because it will help both researchers (in setting new theories) and managers (in designing better functional management systems).

Following success with chapter one, the second chapter is a literature review and it was designed to gain an understanding on what existing literatures have in common about the research topic. As such, a number of theories were revisited and addressed, further opening eyes as to the fact that adoption of e-banking is present on its highest in Malaysian since the invention of such banking platform. This findings is beneficial to the research because it implies that majority of the users do make use of e-banking services and are in the right position to address questions that will be asked in the research questionnaire.

Chapter three also presented clear methods for conducting the research, which the measurability, validity, and reliability of data discussed. The most significant note from this section is the fact that research was online based and this allowed respondents from all over Malaysia to participate in the research. Thus, gathered data represented the Malaysian population more significantly than offline research would have done.

With success recorded in the first three chapter, the fourth chapter proceeded to analyze findings from the primary research and the most significant of such is that the factors influencing adoption of e-banking services in Malaysia include: security concerns on internet – as consumers are worries that the internet doesn’t offer them much security as conventional banking method, which means that the more a view views the internet as being secured for e-banking services, the higher the users’ chances to adopt e-banking services; in line with the internet security, users think that e-baking services have higher risk exposure and the higher their perception of e-banking services in such view, the lower their chances and desire to adopt e-banking service; still in line with security and risk, users are worried about the privacy of their banking services which means that the higher a customer views e-banking service as offering needed privacy, the higher the consumers’ decision to adopt such banking service; and the final measured variable is trust with finding indicating that the more consumers trust bank and their e-banking services, the more the consumer will likely adopt such e-banking services.

In essence, it is a thing of joy to see that the main purpose of this research has been achieved, but it should be noted that the process was not as easy as the findings discussed above. This is because a number of factors hindered the research process and made it difficult for the research to analyze data easily. First of such is the fact that the research found it very difficult to adopt some of the data analysis in SPSS due to lack of familiarity with such analysis, however, the research took out necessary time to understand the analytical process and ensured that all data were analyzed as necessary. Secondary, the large volume of data and information analyze in the course of this research also wore out the researcher’s mental and psychological strength but necessary measures were taken to ensure that such isn’t an issue when it comes to quality of the overall findings.

5.2 Recommendations

In the wake of the findings made from this research, it is recommended that managements should align their e-banking services with increased consumers’ privacy, reduced risk, increased security measures and higher trust. This is because findings indicate that such measures will go a long way in ensuring customer loyalty and overall success of e-banking services in Malaysia.

5.3. Forward for future research

The focus of this research has been on understanding factors that influence customers’ adoption of e-banking services, but such understanding has neglected the need to understand how these factors can be enhanced or mitigated to achieve certain goals. Thus, it is recommended that future research in line within this research should be designed to understand how the identified factors can be enhanced or mitigated in order to support application of findings gathered here.

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