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By
Ankur Bhargava
Acropolis institute of technology and research, Indore




In recent years, the advancement in technological developments in informationtechnology has
lead to the evolution of e-banking in the banking industry. The evolution of e-banking has
Fundamentally transformed the way banks traditionally conduct their businesses and the ways
consumers perform their banking activities (Eriksson et al., 2008; Sayar and Wolfe, 2007).
Today e-banking has experienced phenomenal growth and has become one of the main avenues
for banks to deliver their products and services (Amato-McCoy, 2005).
E-banking reaps benefits for both banks and its customers. From the banks¶ perspective, ebanking
has enabled banks to lower operational costs through the reduction of physical facilities
and staffing resources required, reduced waiting times in branches resulting in potential increase
in sales performance and a larger global reach (Sarel and Mamorstein, 2003). From the
customers¶ perspective, e-banking allows customers to perform a wide range of banking
transactions electronically via the bank's website anytime and anywhere (Grabner-Kraeuter and
Faullant, 2008). In addition, customers no longer are confined to the opening hours of banks,
travel and waiting times are no longer necessary, and access of information regarding banking
services are now easily available (Hamlet, 2000).
However the success of e-banking isn¶t without its problems. Firstly the adoption of e-banking
has not kept pace with that of internet usage (White and Nteli, 2004). This gap is attributed to the
lack of trust among bank customers, particularly among internet users age 65 and older (Ilett,
2005; Perumal and Shanmugam, 2005). Secondly, customers still prefer face to face interaction
(Asher, 1999) due to reasons such as fear of the online environment and lack of trust in the
internet. Recent literature on e-banking showed that the formation of trust can help reduce the
impact of key inhibiting factors such as fears about using the online service among non-ebanking
customers (Vatanasombut et al., 2008).
Moreover, even with the increased usage of e-banking in recent years, banks are faced with a
conundrum - whilst e-banking does have its benefits of convenience and cost savings; the ease at
which e-banking allows for switching back to traditional ways of banking consequently reduces
long term customer commitment (Sarel and Mamorstein, 2003). The commitment-trust theory of
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Morgan and Hunt (1994) proposes that trust leads to commitment in relationships, and so, if trust
is built amongst existing customers, over time they will become committed to the e-banking
service, reducing the chances of customers ³jumping ship´ (Mukherjee and Nath, 2003;
Vatanasombut et al., 2008).
Evident in past literature is the fact that risk plays a role in the formation of trust (Chen and
Dhillon, 2003; Pavlou, 2003), but what is not evident is the relationship risk has with trust
especially in regards to the perceived risk consumers have in transacting on the internet. Past
research studies into the area of risk found that it is not objective risk, but perceived risk which
matter in the formation of trust (Bauer, 1960 as citied in Büttner and Göritz, 2008; Garbarino and
Strahilevitz, 2004). A recent research study found that, perceived risk is directly related to an
Individual¶s adoption of e-banking with many past research studies showing that intention to use
E-banking is often times affected by fears of theft or fraud (Gerrard et al., 2006). The relationship
between perceived risk and trust is an underdeveloped area in the literature. Past work in the area
of trust and perceived risk has not yet managed to fully determine the exact relationship which
risk has on trust, as whilst risk is necessary for the formation of trust, it is not an antecedent of
trust (Chen and Dhillon, 2003). Moreover, trust has been shown in the past to effect perceptions
of risk, as well as having mediating effects through risk (Pavlou, 2003).
Hence the purpose of this research is to investigate whether a customer¶s perception of risk in the
internet would have moderating effects on trust and a customer¶s willingness to use e-banking.
As noted by Büttner and Göritz, (2008), there is a lack of empirical studies in this area. Moreover
by understanding the nature of risk and trust, banks can ascertain the steps necessary on their part
to ensure that the trust which they have built in their services will indeed influence customers¶
adoption and commitment to e-banking.



1- To find out how technology factors can mediate the effects of trust on customers¶
intentions to use internet banking.
2- Identifying trust antecedents that affect customers' decisions
3- To discover which of the technological factors can best mediate the effect of the trust¶s
antecedents on customers¶ intentions to use internet banking.
4- To investigate whether using internet banking can maintain long-termrelationship
marketing (loyalty).




! 

An increasing number of citizens are processing transactions online and the numbers are
likely to increase rapidly in the near future Since the chances of success in launching new
Internet-based services increasewith understanding the adoption/use process of Internet-based
services, numerousstudies on the adoption of online banking have been conducted in recent
years.
The purpose of this research is to investigate whether a consumer¶s perception of risk in
Transacting on the internet (Perceived Risk) would have an influence on their trust of a bank¶s e-
banking website (Specific Trust) and their willingness to use e-banking.





In a research conducted by Abdullah AL-Ghamdi of Brunel Business School in 2009 they

found that a number of factors affect consumers using online banking such as shared values
include security and privacy aspects, communication, customer experiences, usefulness, ease
of use and individuals¶ self-efficacy.
In a research done by A. Dalion in 2006 he found that user satisfaction with e-services is
correlated with perceived convenience, users' skills and experiences, and perceived security.

In a research done by Yeung Kit Man of Hong Kong Baptist University, Hong Kong in 2006
the results of research showed that trusting beliefs had the strongest relationship for users¶
intention to process transaction online. The second important determinant of trusting
intention is perceived site quality. Moreover, structural assurance had the strongest
relationship for trusting beliefs, following by familiarity, perceived site quality and
situational normality. In addition, disposition to trust showed significant to structural
assurance.
In a research done byAhasanul Haque, Arun Kumar Tarofder, Sabbir Rahman, and Md.
Abdur Raquibof International Islamic University Malaysiar in 2009 the result showed that
only protected transaction, have significant impact on consumers¶perception about e-banking
security, followed by service quality and regulatory frame work issues.

In a research done by David H. Wong, Claire Loh, Kenneth B. Yap and Randall Bak in 2009
theresults showed that Perceived Risk has a direct influence on a consumer¶s willingness to use e-
banking and Specific Trust has a positive moderating influence on the relationship between
Perceived Risk and a consumer¶s willingness to use e-banking. Consumers who have low
perceived risk of transacting on the internet are generally more willing to use e-banking. They
suggested that the need for banks to not only employ mechanisms to build trust for their specific
e-banking website, but that banks should first take measures to educate their customers and
manage general consumer perceptions of the risks of transacting on the internet.

In a research done by Rudi Hoppe,Pauline Mugera and Paul Newman in 2001 they found that
attitudinal and perceived behavioural control factors, rather than social influence play a
significant role in influencing the intention to adopt Internet Banking services. In particular,
perceptions of relative advantage, compatibility, trialability and risk regarding Internet use were
found to influence the intention to adopt these services.

 
! 

 
 It is based on primary data in which service method of data collection will be
used.
 

 

 Questionnaire method.

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 Youth age group 18-25
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 Students
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 colleges providing professional education

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!  Sampling is a simple random probabilistic sampling in which chances
of selection of every one is equal.




! Personal method providing questionnaire.

 
  Collected data will be administered by parametric and non-parametric
methods
# 
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