Trust for E-Shopping

A MODEL OF TRUST IN INTERNET BANKING – THE CASE OF PENANG

by

WONG KIM SEONG

Research report in partial fulfillment of the requirements for the degree of Master Business Administration

JUNE 2005

ACKNOWLEDGEMENT

I would like to take this opportunity to express my sincere appreciation to my project supervisor, Associate Professor T. Ramayah for his invaluable guidance and genuine attention throughout the research work.

Not to forget to express my gratitude to my course mate, Jessica for her kind assistance and encouragement throughout my MBA program.

A special debt of gratitude goes to KH Yeoh, who is the constant source of support and inspiration throughout this lengthy journey and bring it to a successful end.

Last but not least, I would not to forget to express my heartfelt thanks to my parents, my brother, my sister-in-law, my lovely niece for their endless love and support.

ii

TABLE OF CONTENTS

ACKNOWLEDGEMENTS TABLE OF CONTENTS LIST OF TABLES LIST OF FIGURES ABSTRAK ABSTRACT

Page ii iii vii viii ix x

Chapter 1: INTRODUCTION 1.1 1.2 1.3 1.4 1.5 1.6 Introduction Problem Statement Research Objectives Research Questions Significance of Study Definition of Key Term 1 4 5 6 6 7

Chapter 2: LITERATURE REVIEW 2.1 2.2 2.3 2.4 2.5 2.6 Internet and World Wide Web Traditional and Internet Business Model E-Commerce and Internet Banking Theory of Reasoned Action (TRA) Technology Acceptance Model (TAM) Definition of Trust 9 9 10 10 12 15

iii

2.7 2.8

Source of Trust Conceptual Trust Model in E-Commerce 2.8.1 2.8.2 2.8.3 Dispositional Trust Institutional Trust Interpersonal Trust

16 17 18 19 20 21 23 24

2.9 2.10 2.11 2.12

The Role of Interpersonal Trust in E-Commerce The Outcomes of Trust in Internet Banking The Antecedents of Trust in Internet Banking Theoretical Framework and Development of Hypotheses 2.12.1 Theoretical Framework 2.12.2 Development of Hypotheses

26 26 28

Chapter 3: METHODOLOGY 3.1 3.2 Introduction Population, Sample Frame, Unit of...