Academic journal article International Journal of Electronic Commerce Studies

Security, Risk, and Trust in Individuals' Internet Banking Adoption: An Integrated Model

Academic journal article International Journal of Electronic Commerce Studies

Security, Risk, and Trust in Individuals' Internet Banking Adoption: An Integrated Model

Article excerpt

ABSTRACT

The fact that trust has a specific influence upon individuals' adoption of internet banking has been proven in previous research. However, only few cues about the related evaluation of trust in the online environment are provided and the definition of trust is still ambiguous. Therefore, an integrated SRT (Security-Risk-Trust) model is proposed in this research to explain (1) the relationships among trust and the other highly relevant factors, perceived security and perceived risk; as well as (2) the effects of the above three factors on individuals' adoption of internet banking. An empirical study is accordingly conducted and the data comes from three universities in north Taiwan, and includes 188 students and faculty. Two results are obtained: first is that perceived security is an important antecedent of trust and perceived risk; second is that perceived security has both direct and indirect effects upon individuals' adoption of internet banking. Hence, we suggest that the management of internet banking should put more emphasis on implementing novel information security mechanisms and marketing methods to increase individuals' perceived security, which is crucial to their internet banking adoption.

Keywords: Trust, Perceived Security, Perceived Risk, Internet Banking Adoption

1. INTRODUCTION

Banking services play a crucial role in modern society. With rapid and rising development of the Internet, service channels of traditional banks have broadened to the Internet. According to GIA estimation1, the number of the global users of internet banking will reach to 657.2 million by 2015, which shows that internet banking will become a significant channel for existing banks. Therefore, the motivation of this research is to determine the factors that influence individuals' internet banking adoption. Given that banking services are highly involved with sensitive information such as finance, privacy, and transactions, the issues about the safety of the sensitive information like security, risk, and trust, can be regarded as the main consideration of individuals' internet banking adoption.

In previous research, trust has been seen as an important factor that has decisive influence on individuals' adoption of online services2, 3, 4, 5, 6, 7, 8. Under this condition, individuals' trust in internet banking determines their adoption9, 10, 11, 12. Nevertheless, relevant evaluation and definition of trust in the online environment are indefinite13. For example, McKnight et al.14 posited structural assurance trust as the security for guarantees, safenets, or other objective structure in a special context, which implies the intensive association between trust and security. Furthermore, Mayer et al.15 defined trust as "the willingness of a party to rely on the actions of another party even in the unmonitored circumstances which may lead to the damage of the Trustor" (p. 712). The argument suggests the high involvement between trust and risk.

Despite the above trust-related statements, seldom research simultaneously covers and studies the issue of trust and the other two factors, risk and security. In addition, Lichtenstein and Williamson16 and Zhao et al.9 argued that risk has effects on individuals' internet banking adoption, while an InsightXplorer investigation assumed that security has the same influence17. Therefore, an integrated SRT (Security-Risk-Trust) model is proposed to determine (1) the relationships among security, risk, and trust, as well as (2) the effects of the above three factors upon individuals' internet banking adoption.

The remainder of this research will be organized as follows. Section 2 offers the theoretical foundation of the SRT model. Section 3 gives the description of the research methodology and the empirical results. Section 4 demonstrates the theoretical and practical implications, limitations, and future research. The last section presents the conclusion.

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