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The banking industry in Malaysia has a significant role in Malaysia’s economic growth. The Malaysian banking sector is under the supervision of Bank Negara Malaysia and is licensed under the Banking and Financial Institutions Act (BAFIA) 1989 (Normalini & Ramayah, 2015). Electronic banking has become the ultimate service delivery system to fulfil the needs of banking customers due to the explosive expansion of the Internet and computer usage (Normalini & Ramayah, 2015). Advancement in information technology and communication networking has offered a wide range of delivering channels shifting from traditional banking to a modern digital platform. In this new millennium, this explosion in the banking industry has impetus to Internet banking with explosive growth in many countries. The successful banking industry will be those that are able to leverage most from the information technology revolution. Increasingly, consumers are demanding more efficient banking services and are becoming more discerning of the power that the technology brings. The current pandemic of Covid-19 has also raised this concern ultimately with reduced movement of people and reduced operating time for the banking industry forcing consumers to use internet banking for their transactions. A survey done by Bank Negara Malaysia (2020), shows that the volume of internet banking transactions by individuals in Malaysia has increased from 141.3 million transactions in 2011 to 862.1 million transactions in 2019 (see Figure 1).
Figure 1.
Volume of mobile banking transaction in Malaysia from 2011 to 2019 (in millions) (Source: Bank Negara Malaysia (2020))
Nonetheless, the wave of internet banking has posed threats and issues that are most concerned by consumers, including privacy, information security, and consumer protection, if there is an inadequate supervision and involvement by the financial institutions (Abubakar A.A. & Tasmin R. B., 2012; Estrella-Ramon, Sa'nchez-Pe'rez, & Swinnen, 2016; Rahi, Ghani, & Ngah, 2019). In Malaysia, cybersecurity breaches more than doubled from 2009 to 2017. Cybersecurity breaches are not exceptional to Malaysia and pose a real risk globally as the world embraces technology. Therefore, despite the many benefits and advantages offered by internet banking services to both banks and consumers, there are still many underlying issues needed to be considered by interested banks, especially the issue of trust (Al-Sharafi, Arshah, Abo-Shanab, & Elayah, 2016; Roy, Kesharwani, & Bisht, 2012). Trust was found to be one of the momentous factors in clarifying consumers’ attitudes toward the acceptance of internet banking services (Akhlaq & Ahmed, 2011; Chaudhry, Parveiz, & Javed, 2016). A question that has arisen during the current pandemic of Covid-19 situation is whether the increase in the use of online banking will be a passing trend while the confinement and social-distancing measures are in place, or whether it will mark a turning point on the market. Gaining the trust of consumers in internet banking services is considered as one of the most important indicators of success to many information system innovations (Yousefi & Nasiripour, 2015; Abu-Shanab, 2014). Thus, the goal of the present research is to investigate the factors affecting customer′s trust towards internet banking services in Malaysia.