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Model of “The Influence of Perceived Risk Factors on Intention to Adopt Internet Banking Services in Iran”.



Time risk

Financial risk

Performance risk

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Model of “The Influence of Perceived Risk Factors on Intention to Adopt Internet Banking Services in Iran”.

Social risk

Security risks

Personal information risk

core

Figure 2.8: Model of “The influence of perceived risk factors on intention to adopt online banking services in Iran”.

Source: Payam Hanafizadeh, Hamid Reza Khedmatgozar, 2012

The results show that, except for social risk, all other factors of perceived risk such as time risk, performance risk, security risk, personal information risk have negative impacts on the intention to accept using online banking services. In particular, the majority of customers studied believe that perceived risk factors (except for social perceived risk) are the main reasons why customers consider whether to accept using online banking or not.

2.4 Proposed research model.

2.4.1 Characteristics of customers who intend to accept using online banking services in Vietnam

In Vietnam, online banking services have developed strongly in recent times. In 2004, there were only 5 banks implementing this service. But according to the statistics of the 2012 E-commerce Report, this number has increased to 46 banks. Banks all focus on investing, developing infrastructure, increasing



add services to better serve online banking payment services with an increasingly wider scope. The electronic payment market has experienced a rapid acceleration in recent years. In the third quarter of 2012, according to research by IDG-BIU (Business Intelligence Unit), the number of Internet Banking users increased by 35% compared to 2010, 40 banks said they had Internet Banking services and the number of banks claiming to provide Mobile Banking services also increased to 18 banks.

On the other hand, people in Vietnam are increasingly familiar with e-commerce. According to statistics, Vietnam has about 90 million people, 36% (31.3 million) access the Internet and more than half of them shop online. However, according to the 2013 E-commerce Report, customers have many concerns when using online payment or online shopping such as concerns about: poor quality products, bad prices, personal information security, websites that do not satisfy their needs... This proves that online banking services still have a very large market to develop.

Customers are getting busier and busier. They have to race against time due to increasingly hectic life. Therefore, saving time and convenience are two aspects of top concern when choosing a form of transaction. Online banking services are advertised to help customers save time. However, many customers are still concerned about whether online banking really helps them save time, that when there is a transaction error or any other problem, it is easy for customers to solve it or not? Does online banking service work well when they need to use it? Considering this aspect, the time and operational risk factors will affect whether customers accept online banking services or not.

In addition, customers of banks in Vietnam are increasingly concerned about security, personal information safety and financial security. This comes from the natural needs of people when the level of education is improved. Recently, in Vietnam, there have been many incidents in which customers lost money due to the unsafe electronic banking system. In addition, in the current economic situation,



recession, the situation of prices constantly increasing while people's incomes cannot keep up with the rate of inflation. Therefore, saving costs when buying products and services also affects customers' attitudes when choosing transaction methods. Therefore, considering this aspect, the factors of financial risk, security and personal information safety will affect the acceptance of online banking services.

Moreover, the need for face and relationships of customers is increasing day by day. This comes from the natural needs of people when material and spiritual life is improved according to Maslow's hierarchy of needs as well as the requirements placed on the living environment, especially the business environment in the current context. Does the use of online banking services make customers feel satisfied with the need to express? When using online banking services, that is, customers will perform transactions themselves and not through bank staff, this is still strange to many customers who are used to transactions at branches and transaction points of the bank, so they will feel hesitant. Thus, social and psychological factors may affect the intention to accept using online banking services.

2.4.2 Research model " The impact of perceived risk factors on customers' intention to use online banking services in Ho Chi Minh City".

Inheriting the study “The influence of perceived risk factors on the intention to accept using online banking services in Iran” by Payam Hanafizadeh, Hamid Reza Khedmatgozar (2012) and the theory of perceived risk, the study proposes that perceived risk factors affecting the intention to accept using online banking include performance risk, security risk, financial risk, personal information risk, time risk and social risk.

According to Bauer (1960), perceived risk refers to the nature and level of risk that customers perceive in contemplating a specific purchase. Customers' perceived risk of online banking is their perception of the risks that



Online banking services cause. Depending on the knowledge, personality and experience of each customer, the perceived risk is different. There are risks that are familiar to one person but unfamiliar to another. For example, for the risk of the online payment system not working continuously, some customers have encountered the above situation so they are very afraid, while other customers have almost no concept of the above problem. When using online banking services, customers often worry about errors or interruptions in transactions, the system is unsafe or hacked, or takes a lot of time... It is the customer's perception of the above risks that forms the customer's perceived risk.

Performance risk: According to Grewal et al. (1994), performance risk is the risk that the online banking system does not function properly, or the system has technical errors. Performance risk in online banking arises from: Money not being transferred on time (untimely transactions), customers having difficulty accessing the system and not meeting the service provided to customers (Littler and Melanthiou, 2006).

System availability is also a factor that helps build customer trust in the bank. Customers always expect the system to be available continuously and conveniently. One of the conveniences of this system is that it helps customers not have to go to the counter but still make their transactions. However, in many cases, customers cannot make transactions as they wish. Performance risks also arise from the fact that the online payment system does not work as expected by customers. Customers make transfers or payments but they are not processed in a timely manner. Risks also arise from customers having difficulty accessing the bank's online payment website due to technical errors or poor connection. Therefore, customers sometimes cannot complete their ongoing transactions. Customers worry about their unfinished transactions. They wonder: is their transaction completed or not? Or did they make duplicate transactions? Results of previous studies



shows that customers' perception of performance risk is a major concern when using online payment systems.

In the study of Payam Hanafizadeh, Hamid Reza Khedmatgozar (2012), performance risk has the strongest influence on customers' intention to adopt online banking services. Customers are afraid of the online banking system not working as expected, the system is suspended or unstable, slow connection speed as a major concern.

Therefore, it can be hypothesized that:

H1: Performance risk has a negative impact on intention to adopt online banking services.

Security risk: is the risk that the bank's online website can be counterfeited, or the online payment system can be attacked, or the customer's account can be illegally accessed (Featherman & Pavlou, 2003, Lee, 2009).

Security issues are becoming increasingly important. In fact, security is considered a matter of survival for online banking services in today's fiercely competitive environment. Customers' concerns about the collection and use of personal information tend to increase in the era of e-commerce and Internet development. Customers are increasingly aware of security. Banks that are proactive in recognizing and responding well to the issue of customer financial information security will create advantages for the bank as well as bring benefits to their customers. The bank will enhance its reputation and thereby have a greater influence on customers' decisions to choose a bank to serve.

According to the results of research by Fereshteh Farzianpour et al., 2011, Anita Lifen Zhao et al., 2008 Payam Hanafizadeh, Hamid Reza Khedmatgozar, 2012, security risks have a great influence on the intention to accept using online banking.

Therefore, it can be hypothesized that:

H2: Security risk has a negative impact on intention to adopt online banking services.



Financial Risk: Financial risk is also known as economic risk. Financial risk is the risk that a customer may lose money or lose control of his account or the transaction fails but is not refunded (Featherman, Pavlou, 2003, Lee, 2009). For example, when a customer purchases an airline ticket through online banking, the money is deducted but the e-ticket is not confirmed as paid.

According to the results of the study by Payam Hanafizadeh, Hamid Reza Khedmatgozar, 2012 , financial risk is an important concern of customers about online banking. Customers are concerned about the possibility of receiving compensation from the bank in case of mistakes, the possibility of entering incorrect data and the possibility of losing control of the account leading to financial loss. The study confirms that financial risk is a barrier that makes users hesitate to accept using online banking services.

Therefore, it can be hypothesized that:

H3: Financial risk has a negative impact on intention to adopt online banking services.

Personal information risk: Personal information is private information belonging to customers. Customers always want to control and protect their personal information against the risk of information being collected for many purposes (Aldas- Manzano, Lassala-Navarre, Ruiz-Mafe & Sanz-Blas, 2009 cited in Rahmath Safeena et al., 2011). Therefore, this risk refers to the possibility that this information can be disclosed or customers cannot control their personal information (Featherman & Pavlou, 2003, Lee, 2009). Most customers are very concerned about personal information being disclosed and they will get into trouble in the future. According to the results of the study Payam Hanafizadeh, Hamid Reza Khedmatgozar (2012), personal information risks negatively affect the intention to accept using online banking services. Customers are worried about banks using personal information illegally or providing, selling to other organizations causing them to have privacy problems, such as receiving unwanted emails...



Therefore, it can be hypothesized that:

H4: Personal information risk has a negative impact on the intention to adopt online banking services.

Time risk: Time risk is the risk that customers may spend more time using online payment services than other payment methods. According to (Featherman & Pavlou, 2003, Lee, 2009), time risk refers to the risk that customers have to spend more time learning how to use, use and troubleshoot when using online banking services.

The main advantage of the online payment system is that it helps customers save time, allowing transactions to be completed within seconds. However, in some cases, customers have to spend more time than when transacting through other channels. For example, customers make transfers outside the system. If customers make transfers at the counter, the bank teller will execute the order immediately. However, when customers transfer money through the online payment system, there will be a time delay to complete the transaction. If this time delay is not acceptable to the customer, the customer may decide not to use the service anymore.

According to the results of the study by Payam Hanafizadeh et al. (2012), time risk is the risk that greatly affects the intention to accept using online banking services. Therefore, it is possible to propose the hypothesis:

H5: Time risk has a negative impact on intention to adopt online banking services.

Social risk: Social risk is the risk that the use of online banking services is not supported or accepted by people around (family, friends, colleagues) or even loses social position in these groups in case of errors or fraud in use, or cannot directly contact bank staff for help during use (Featherman & Pavlou, 2003, Lee, 2009).



Customers using online banking services may be negatively perceived or viewed differently by those around them. Those around them may have a negative view of online banking services, and therefore, they may also have a negative view of customers using these services. On the other hand, because customers use technology to make transactions, there is no interaction between customers and bank employees. Therefore, when errors or problems occur, some customers are also hesitant to ask for help from bank employees.

In the study Fereshteh Farzianpour et al. (2013) showed that social risk has a negative impact on the intention to use online banking although it is the least influential factor. From that, the author proposed the hypothesis for the concept of perceived security risk in this study as follows:

H6: Social risk has a negative impact on intention to adopt online banking services.

Thus, the following research model can be proposed:


Performance risk

H1

Security risks

H2

Financial risk

H3


H4

Personal information risks

Intention to accept using banking services

online shop

H5

Time risk

H6

Social risk

Figure 2.9: Proposed research model.

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