Academic journal article Researchers World

A Structural Equation Modeling of Internet Banking Usage in Malaysia

Academic journal article Researchers World

A Structural Equation Modeling of Internet Banking Usage in Malaysia

Article excerpt

ABSTRACT

Internet banking is a contemporary trend amongst financial services worldwide. However, the level of acceptance among consumers is unknown. This study intends to examine the determinants of internet usage intention in banks using Technology Acceptance Model (TAM) and exploring the mediating effect of perceived usefulness, perceived ease of use and perceived credibility on the relationship between self-efficacy and intention. The exogenous variable is selfefficacy and the mediators are perceived ease of use, perceived usefulness and perceived credibility while endogenous variables is intention of banking internet usage. Using structural equation modeling (SEM) analysis method, the results show that self-efficacy has significant and positive direct impact on perceived usefulness, perceived ease of use and perceived credibility while two variables perceived usefulness and perceived ease of use have direct significant positive influence on intention. Perceived credibility has a insignificant direct impact intention of internet banking usage. Perceived usefulness and perceived ease of use are partial mediators while perceived credibility is a full mediator. In general the use of TAM in internet banking usage intention is substantiated in this study.

Keywords: Internet Banking; Technology Acceptance Model, Structural Equation Modeling.

INTRODUCTION:

The growing phenomenon in financial services is the use of the internet banking as a new marketing channel for financial services. However, the level of acceptance of internet banking usage intention by the consumers in Malaysia is unknown. Consumer's use of internet banking requires acceptance of the technology, which can be complicated because it involves the changing of behavioral pattern. Moreover, internet technology could be difficult for some consumers to understand. Besides that the consumers also need to understand the complex nature of financial services. The combined effect of consumers' understanding of both the internet channel and financial services could contribute to the low acceptance level of the intention of internet banking usage.

Internet banking is relatively new especially in Malaysian banking environment. Previous studies dealt with conventional focus of internet banking research such as technological development, but this is now shifting to user-focused research. Further research is needed to understand the specific drive, motivation and needs and expectations of internet users to use the internet banking as a source of doing transactions compared to conventional banking. Many banks in Malaysia has their own internet banking system such as Maybank2u.com and PBeBank.com but unfortunately the rate of usage of the internet banking is rather low compared to the European countries and the United States of America.

Internet banking acceptance will be studied by examining the causes behind frequency of use of internet banking. This identifies the perceived usefulness, perceived ease of use of a technology and perceived credibility as determining user intention behaviors. This study also intends to investigate the mediating effect of these three factors on the relationship between self-efficacy and intention.

CONCEPTUAL DEVELOPMENT TO THE HYPOTHESIZED MODEL:

Technology acceptance model (Davies 1989) or TAM as it is commonly known, was adapted from the theory of reasoned action (Ajzen & Fishbein, 1980; Fishbein & Ajzen, 1975) and theory of planned behavior (Ajzen, 1985; Ajzen, 1991). TAM proposes specifically to explain the determinants of information technology enduser's behavior towards information technology (Saade, Nebebe & Tan, 2007). In TAM, Davis (1989) proposes that the influence of external variables on intention is mediated by perceived ease of use (PEU) and perceived usefulness (PU). TAM also suggests that intention is directly related to actual usage behavior (Davis, Bagozzi & Warshaw, 1989). …

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