Perceived information security and consumer trust in electronic commerce transactions: A survey of Internet banking adoption in Malaysia

Abstract

Consumers’ trust in their online transactions is vital for the sustained progress and development of Internet Banking. This study proposes that in addition, consumers’ perception of information security and privacy influence their trust in online transactions. This study builds upon this finding to develop and validate measures of consumers' perceived information security and perceived privacy of their online transactions which are then theorized to influence their trust in Electronic Commerce transactions. This study incorporates theories from information systems, trust, electronic commerce and Internet banking in order to provide reliable secondary data to support our findings. Based on the survey that was undertaken in Malaysia, this research shows that consumers exhibit variability in their perceptions of security, privacy and trust between online and offline transactions This research proposes that the perceptions of information security and privacy are factors that affect the consumers’ trust in the institutional governance mechanisms underlying the Internet. In fact this research conducts empirical studies and through successive refinement and analysis using the Regression technique, the hypothesized relationships is tested while verifying the excellent measurement properties associated with the survey instrument. This study finds that the consumers’ perceived information security and trust are indeed distinct constructs but the effect of perceived security on adoption of Internet Banking is strongly mediated by trust.