Chapter 5: Conceptual Development of the Initial Framework
5.4 Online Banking Trust and Acceptance Framework
5.4.2 Challenges Affecting Customers’ Trust and Acceptance
The challenges of online banking, as explained in chapter two, appear to be the difficulties and issues that customers face and that affect their trust and acceptance of online banking technology. This chapter is looking at the more cohesive parts of the theoretical framework and more specifically in this subsection, highlighting the relationships and movements of the components of challenges affecting customers’ trust and acceptance, as shown in the theoretical framework in Figure 5. 1. Different researchers present online banking challenges that affect customers’ trust and acceptance in different ways (e.g. Aladwani, 2001; Gupta et al., 2004; Podder, 2005; Abukhzam and Lee, 2010; Houda and Debabi, 2012).
This research highlights online banking challenges in a way that is explained more in chapter two by presenting trust and risk and the specific issues that are associated with online banking technology as found in the best practice and use of the technology worldwide. The key findings at the end of chapter two also pointed out the key factors that were considered when shaping the proposed framework as shown above in Figure 5. 1. The following is a further explanation of these relationships and a statement of the challenges and issues that customers face in relation to trust and acceptance of online banking technology.
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5.4.2.1 Perceived Trust and Risk/Issues
The discussion in chapter two (section 2.5.5: p. 18) highlights the importance of trust and perceived risk in the issue of online banking trust and acceptance. The present study agrees with the definition of risk as an issue commonly thought of as uncertainty regarding the possibly negative consequences of using a product or service of online banking. Kim and Prabhakar (2000) suggest that perceived risk and trust affect trusting behaviour in the online banking context. Trust is needed essentially only in uncertain situations since trust effectively means to assume certain issues and hence to become vulnerable to trusted parties (Hosmer, 1995).
To make this clearer, if there was no issue and actions could be taken with complete certainty, no trust would be required. At this point, in comparing trust in terms of risk in online banking technology, especially with early adopters in a developing country like Libya, significant outcomes may emerge for accepting and trusting online banking technology. The developed framework above in figure 5.1 shows that, perceived risk and trust have a mutual relationship with online banking issues in a way that, as explained above, trust is required essentially only for uncertain events or transactions of the kind that can be conducted online through online banking technology.
The framework also shows that perceived trust and risk are moderated by both customer demographics and customer technology level in a way that, if we take customer’s age as an example, customers who are aged 26-45 years may be more aware of the risks associated with online banking than those aged 15-25 years, when it comes to them intending to use the technology. However, male customers in this study appear to rate more highly their awareness of using online banking technology in Libya than female customers and as a consequence, males might be more aware of trust and risk of the technology than females. Moreover, customers with a confident level of technology awareness have more of a chance of knowing about online banking technology and accordingly are likely to be more aware of trust and related risk.
That is only a simple example of how customer demographics and customer technology level are influencing the perceived relationship of trust and risk. Further
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explanation will be given in the next chapters (chapters 6, 7). As shown in the framework (figure 5.1), perceived trust and risk and online banking issues are both linked to challenges affecting customers’ trust and acceptance in a way that the expected or perceived risk might be of concern to customers when they plan to use online banking technology.
5.4.2.2 Online Banking Issues
The main channel for online banking technology presently is the Internet, which is associated with a variety of issues and obstacles facing customers when they conduct banking transactions using online banking technology through the Internet (Sathye, 1999). It is not enough for a bank or a customer to think only about the benefits of online banking but rather a bank or a customer should be prepared to address potential online banking problems/difficulties (Aladwani, 2001). Together with perceived trust and risk, online banking is one of two components of the challenges affecting customers’ trust and acceptance, as shown in the theoretical framework in figure 5.1. Online banking issues are mainly associated with the Internet. A statement of the online banking issues that have been considered in this study and that are mentioned in the framework is as follows:
Security issue of online banking: is the user falling victim to one or more of the online banking security breaches or issues such as Intrusion, Information Theft, Fraud, and Denial of Service (Aladwani, 2001). Security is one of the most important online banking issues challenging customers’ trust and acceptance of online banking in a developing country like Libya. Security issues are the first thing that customers think about when intending to use online banking technology. A more detailed explanation of this subject was given in chapter 2, section 2.5. pp. 14-17.
Technical and legal issues:
Technicality and legality are additional issues that online banking customers have to confront when they are intending to use the technology. The kind of technical issues that usually arise are problems associated with the technology that supports exchanges over the Internet and these may constitute a barrier to success for this strategy. Such technical110
problems can make the Internet technology seem uncertain and requires the customers to demonstrate a high level of trust (Angelides, 1997; Baer, 1998). Reputation issue: Reputation arises from the strength of a particular brand
name, endorsement from trusted parties, and previous interactions online or offline (Egger, 2000). When customers process information on online banking, the first thing they are likely to consider is the bank’s reputation. A more in-depth explanation regarding reputation issues is provided in chapter 2.
Privacy issue
:
Privacy and confidentiality in online banking refers to the protection of customers’ personal information. The growing capacity of online banking technology for online transactions and information processing has made privacy an increasingly key issue (Casalo, 2007). Privacy is one of the five issues addressed in this study and in this chapter appears as one of the components of online banking issues. A more detailed explanation of the privacy issue can be found in chapter 2. Transactional/Operational Issues: Online banking issues were clearly reviewed and theorised in chapter 2 and a framework was developed to explain the complete picture in this study. Figure 5.1 shows the ‘roadmap’ of the relationships in this study. With regard to online banking issues, figure 5.1 shows a linkage between online banking issues and challenges affecting online banking trust and acceptance in a way that includes perceived trust and risk, as online banking issues are part of the challenges that influence customers trusting in and accepting online banking technology. As previously, these elements are also moderated by both customer demographic profiles and customer technology level. If we take the previous example stated in the previous subsection regarding customer’s age and in terms of online banking issues, this study shows that customers aged between 26-46 years appear to have more awareness of the technology of online banking and are expected to show concerns about the issues associated with it. They are not only expected to be aware of online banking issues, but the most important thing is to know what types of issues and how to deal with them. Online banking issues have shared relationships with perceived trust and risk, as highlighted above in the previous subsection.
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