The Influence of Privacy and Trust on the Adoption of Internet Banking in Bangladesh

Authors

  • Mohammad A. Ashraf School of Business United International University, Bangladesh
  • Mirza M. D. Alam School of Business United International University, Bangladesh
  • Muhammad S. I. Noor School of Business United International University, Bangladesh

DOI:

https://doi.org/10.32890/mmj2010.14.3

Keywords:

Internet banking, privacy, trust, subjective norms, perceived behavioural control

Abstract

In Bangladesh, the expansion of Internet banking is beset with several infrastructural, institutional, and regulatory constraints. Despite the constraints, efforts by the Bangladesh Bank in modernizing the country’s payment system and commitment by the government in building ‘Digital Bangladesh’ have brought competition among the scheduled banks to improve banking services and rapidly adopt Internet banking on a wider scale. However, several opinion polls have revealed that many clients are found reluctant in adopting banking via the Internet because of their concerns about the privacy of the personal information they provide to online. Using the theory of planned behaviour as its theoretical basis, this study examined the relationships among beliefs about Internet privacy and trust, along with beliefs about perceived behavioural control and the expectations of important others and online banking behaviour. Data were collected from 327 university students. Analysis of the data indicates that beliefs about trust and privacy positively affect attitudes toward Internet banking, but attitude is found not to significantly affect Internet banking behaviour. Normative beliefs positively affect subjective norms which in turn affect Internet banking behaviour. Similarly, beliefs about self-efficacy regarding Internet banking positively affect perceived behavioural control, which in turn affects actual online banking behaviour.

 

Downloads

Download data is not yet available.

References

Akinci, S., Safak, A., & Eda, A. (2004). Adoption of internet banking among sophisticated consumer segments in an advanced developing country. International Journal of Bank Marketing, 22(3), 212–232.

Albrechtslund, A. (2008). Online social networking as participatory surveillance. First Monday, 13(3), 11–11.

Awal, M. A. (2004). Internet in Bangladesh: Past, present & a better future. Indonesia, Asia Pacific Networking Group.

Azam, M. S. (2007). Implementation of B2C e-commerce in Bangladesh: The effects of buying culture and e-infrastructure. Advances in Global Business Research, 3(1), 55-81.

Azjen, I. (1985). From intentions to actions: A theory of planned behavior. In Kuhl, J. & Beckman, J. (Eds.), Action-control: From cognition to behavior (pp. 11–39). Heidelberg, Springer.

Azjen, I. (1991). The theory of planned behavior. Organizational Behavior and Human Decision Processes, 50, 179–211.

Azjen, I., & Fishbein, M. (1980), Understanding attitudes and predicting social behavior. Englewood Cliffs, NJ: Prentice-Hall. http://mmj.uum.edu.my

Bakta, N. C., & Sarder, M. M. R. (2007). Online banking: Bangladesh perspectives. Paper prepared for presentation at the XVI Biennial Conference.

Bandura, A. (1997). Self-efficacy: Toward a unifying theory of behavioral change. Psychological Review, 84, 191–215.

Baraghani, S. N. (2007). Factors influencing the adoption of Internet banking (Unpublished doctoral dissertation). Department of Business Administration and Social Sciences, Lulea University of Technology.

Battacherjee, A. (2002). Individual trust in online firms: Scale development and initial trust. Journal of Management Information Systems, 19(1), 211–41.

Baten, M. A., & Kamil, A. A. (2010). E-Banking of economical prospects in Bangladesh. Journal of Internet Banking and Commerce, 15(2), 1–10.

Byford, K. S. (1998). Privacy in cyberspace: Constructing a model of privacy for the electronic communications environment. Rutgers Computer & Technology Law Journal, 24, 1–74.

Byron, R. K., & Ahmed, N. I. (2009). Banking enter new era. Daily Star, Nov. 3, 1–1.

Chang, H. H., & Hamid, M. R. (2010). An empirical investigation of Internet banking in Taiwan. Global Journal of Business Research, 4(2), 39–47.

Cole, M., & Brooks, L. (2009). Social aspects of social networking. International Journal of Information Management, 29, 248.

Coppola, N., S. R. Hiltz, & N. Rotter (2004). Building trust in virtual teams. IEEE Transactions on Professional Communication, 47(2), 95–104.

Cranor, L. F. (2000). Beyond concern: Understanding net users’ attitudes about online privacy. In Vogelsang, I. & Compaine, B.M. (Eds.), The Internet upheaval: Raising questions, seeking answers in communications policy (pp. 47–70). Cambridge, MA: The MIT Press.

Culnan, M. (1993). How did they get my name? An exploratory investigation of consumer attitudes toward secondary information use. MIS Quarterly, 17(3), 341–63.

Davis, F. D., Bagozzi, R. P., & Warshaw, P. R. (1989). User acceptance of computer technology: A comparison of two theoretical models. Management Science, 35(8), 982–1003.

DeVellis, R. F. (2003). Scale development: Theory and applications (2nd ed.). Thousand Oaks: Sage Publishers.

Doyle, S. (2006). The evolution of self service environments and their potential business impact. Journal of Database Marketing & Customer Strategy Management, 13(3), 236–243.

Durkin, M. (2007). In search of the Internetbanking customer: Exploring the use of decision styles. International Journal of Bank Marketing, 22(7), 484–503.

Encyclopedia Britannica (2006). New Delhi, India, Encyclopedia Britannica (India) Pvt. Ltd. and Impulse Marketing.

Fogel, G., & Nehmad, E. (2009). Internet social network communities: Risk taking, trust, and privacy concerns. Computers in Human Behavior, 25, 153–160.

Frye, N. E., & Dornisch, M. M. (2010). When is trust not enough? The role of perceived privacy of communication tools in comfort with self-disclosure. Computers in Human Behavior, 26, 1120–1127.

Gambi, S. (2009). The development of trust within close relationships formed within social network sites. In Proceedings of the WebSci’09: Society On-Line. Athens,

Greece, March 18-20, 2009.

Gan, C., & Clemes, M. (2006). A logit analysis of electronic banking in New Zealand. International Journal of Bank Marketing, 24(6), 360–383.

George, J. F. (2002). Influences on the intent to make Internet purchases. Internet Research, 12(2), 165–180.

Giannakoudi, S. (1999). Internet banking: The digital voyage of banking and money in cyberspace. Information and Communications Technology Law, 8(3), 205–43.

GVU. (1997). GVU’s WWW user survey. Retrieved from www.gvu.gatech.edu/ user_surveys. http://mmj.uum.edu.my

Hernando, I., & Nieto, M. J. (2007). Is the Internet delivery channel changing banks’ performance? The case of Spanish banks. Journal of Banking and Finance, 31, 1083–1099.

Hoffman, D. L., Novak, T. P., & Peralta, M. (1999). Building consumer trust online. Communications of the ACM, 42(4), 80–85. Huang, J., Makoju, E., Newell, S., & Galliers,

R. D. (2003). Opportunities to learn from ‘failure’ with electronic commerce: A case study of electronic banking. Journal of Information Technology, 18, 17–26.

Jarvenpaa, S. L., Tractinsky, N., & Vitale, M. (2000). Consumer trust in an Internet store. Information Technology and Management, 1, 45–71.

Jarvenpaa, S. L., & Todd, P. A. (1997a). Is there a future for retailing on the Internet? In Peterson, R.A. (Ed.), Electronic Marketing and the Consumer (pp. 139–54). Thousand Oaks, CA: Sage Publication.

Jarvenpaa, S. L., & Todd, P. A. (1997b). Consumer reactions to electronic shopping on the World Wide Web. International Journal of Electronic Commerce, 1(2), 59–88.

Jarvenpaa, S. L., Knoll, K., & Leidner, D. E. (1998). Is anybody out there? Antecedents of trust in global virtual teams. Journal of MIS, 14(4), 29–64.

Jones, J. M., & Vijayasarathy, L. R. (1998). Internet consumer catalog shopping: Findings from an exploratory study and directions for future research. Internet Research, 8(4), 322–30.

Joinson, A. N. (2008). ‘Looking at’, ‘Looking up’ or ‘Keeping up with’ people? Motives and uses of facebook. In Proceedings of

CHI 2008, 1027-1036. New York, NY: ACM Press.

Kim, M. S., & Ahn, J. H. (2007). Management of trust in the e-Marketplace: The role of the buyer’s experience in building trust. Journal of Information Technology, 22, 119–132.

Khalifa, M., & Limayem, M. (2003). Drivers of Internet shopping. Communications of the ACM, 46(12), 233–239.

Langendorfer, P. (2002). M-commerce: Why it does not fly (yet?). Proceedings of the International Conference on Advances in Infrastructure for e-business, e-education, e-science and e-medicine on the Internet, L’Aquila.

Lee, M. K. O., & Turban, E. (2001). A trust model for consumer Internet shopping. International Journal of Electronic Commerce, 6(1), 75–91.

Limayem, M., Khalifa, M., & Frini, A. (2000). What makes consumers buy from Internet? A longitudinal study of online shopping. IEEE Transactions on Systems, Man, and Cybernetics – Part A: Systems and Humans, 30(4), 421–32.

Litman, J. (2000). Information privacy / information property. Stanford Law Review, 52(5), 1251–1283.

Liu, C., Marchewkab, J. T., Luc, J., & Yu, C. (2005). Beyond concern—a privacytrust-behavioral intention model of electronic commerce. Information & Management, 42, 289–304.

Maheswaran, M., Tang, H. C., & Ghunaim, A. (2007). Towards a gravity-based trust model for social networking systems. Proceedings of the 27th International Conference on Distributed Computing Systems Workshops, p.24, June 22-29. McKnight, D. H., Cummings, L. L., & Chervany,

N. L. (1998). Initial trust formation in new organizational relationships. Academy of Management Review, 23(3), 473–490.

McKnight, D. H., Choudhury, V., & Kacmar, C. (2002). Developing and validating trust measures for e-commerce: An integrative typology. Information Systems Research, 13(3), 334–359.

Metzger, M. J. (2004). Privacy, trust and disclosure: Exploring barriers to electronic commerce. Journal of Computer-Mediated Communication, 9(4), 1–10.

Mia, et. al. (2007). E-banking: evolution, status and prospects. The Cost and Management. 35(1), 36–48.

Miyazaki, A. D., & Fernandez, A. (2001). Consumer perceptions of privacy and http://mmj.uum.edu.my security risks for online shopping. Journal of Consumer Affairs, 35(1), 27–44.

Mukherjee, A., & Nath, P. (2003). A model of trust in online relationship banking. International Journal of Bank Marketing, 21(1), 5–15.

Nath, R., Paul S., & Monica P. (2001). Bankers’ perspectives on Internet banking. e-Service Journal, 1(1), 21–36.

Nelson, P., & Richmond, W. (2007). Internet banking: Gold mine or money pit? Academy of Banking Studies Journal, 6(1), 1–25.

Parameswaran, M., & Whinston, A. B. (2007). Research issues in social computing. Journal of the Association of Information Systems, 8(6), 336–350.

Pavlou, P. A., & Gefen, D. (2004). Building effective online marketplaces with institution-based trust. Information Systems Research, 15(1), 37–5.

Pavlou, P. A. (2003). Consumer acceptance of electronic commerce --- integrating trust and risk with the technology acceptance model. International Journal of Electronic Commerce, 7(3), 69–103.

Pavlou, P. A. (2002). What drives electronic commerce? A theory of planned behavior perspective. Academy of Management Proceedings, 2002, A1-A6.

Pearce, J. L., Branyiczki, I., & Balacsi, G. (1994). Person-based reward systems: A theory of organizational reward practices in reform-communist organizations. Journal of Organizational Behavior, 15, 261–82.

Piccoli, G., & B. Ives (2003). Trust and the unintended effects of behavior control in virtual teams. MIS Quarterly, 27(3), 365–395.

Salehi, M., & Zhila, A. (2008). Fraud detection and audit expectation gap: Empirical evidence from Iranian bankers. International Journal of Business and Management, 3(10), 65–77.

Salehi, M., Ali, M., & Zhila, A. (2008). Islamic banking practice and satisfaction: Empirical evidence from Iran. ACRM Journal of Business and Management Research, 3(2), 35–41.

Rahman, M. M. (2007). Innovative technology and bank profitability: The Bangladesh experience. Policy Analysis Unit (PAU), Bangladesh Bank WP 0803.

Ratnasingham, P. (1998). The importance of trust in electronic commerce. Internet Research, 8(4), 313–321.

Samuelson, P. (2000). Privacy as intellectual property. Stanford Law Review, 52(5), 1125–1175.

Sarel, D., & Marmorstein, H. (2003). Marketing online banking services: The voice of the customer. Journal of Financial Services Marketing, 8(3), 106–118.

Sciglimpaglia, D., & Ely, D. (2006). Customer account relationships and e-Retail banking usage. Journal of Financial Services Marketing, 10(4), 109–122.

Shah, M. H., & Siddiqui, F. A. (2006). Organizational critical success factors in adoption of e-banking at the Woolwich Bank. International Journal of Information Management, 26(6), 442–456.

Shih, Y., & Fang, K. (2004). The use of a decomposed theory of planned behavior to study Internet banking in Taiwan. Internet Research, 14(3), 213–223.

Shin, D. (2010). The effects of trust, security and privacy in social networking: A security-based approach. Interacting with Computers, 10, 1–35.

Song, J., & Zahedi, F. (2001). Web design in e-commerce: A theory and empirical analysis. Proceedings of the 22nd International Conference on Information Systems, 205–20.

Smith, H. J., Milberg, S. J., & Burke, S. J. (1996). Information privacy: Measuring individuals’ concerns about organizational practices. MIS Quarterly, 20(2), 167–95.

Suh, B., & Han, I. (2003). The impact of customer trust and perception of security control on the acceptance of electronic commerce. International Journal of Electronic Commerce, 7(3), 135–161.

Swire, P. P., & Bermann, S. (2007). Information privacy, official reference for the certified information privacy professional (CIPP). New York: Iapp Publication. http://mmj.uum.edu.my

Tan, M., & Teo, T. S. H. (2000). Factors influencing the adoption of Internet banking. Journal of the Association for Information Systems, 1(5), 1–42.

Taylor, S., & Todd, P.A. (1995a). Understanding information technology usage: A test of competing models. Information Systems Research, 6(2), 144–176.

Taylor, S., & Todd, P.A. (1995b). Assessing IT usage: The role of prior experience. MIS Quarterly, 19(4), 561–70.

Varian, H. R. (1992). Microeconomic analysis (3rd ed.). New York, Norton, W.W.

Warren, S. D., & Brandeis (1890). The right to privacy. Harvard Law Review, 4(4), 193–220.

Weiss, S. (2009). Privacy threat model for data portability in social network applications. International Journal of Information Management, 29, 249–254. Wright, D., Gutwirth, S., Friedewaldc, M., Hert, P. D., Langheinrichd, M., & Moscibroda,

A. (2009). Privacy, trust and policymaking: Challenges and responses. Computer Law and Security Review, 25, 69–83.

Downloads

Published

01-12-2010

Issue

Vol. 14 (2010): Malaysian Management Journal (MMJ) Vol. 14, 2010

Section

Articles

How to Cite

A. Ashraf, M., D. Alam, M. M., & I. Noor, M. S. (2010). The Influence of Privacy and Trust on the Adoption of Internet Banking in Bangladesh. Malaysian Management Journal, 14, 33-48. https://doi.org/10.32890/mmj2010.14.3

Research impact

Harvested 2026-09-07
0 citations recorded so far

Counts differ between services because each indexes a different body of literature. None of them is the whole picture.

Identifiers DOI 10.32890/mmj2010.14.3