Security Policy Issues in Internet Banking in Malaysia

Security Policy Issues in Internet Banking in Malaysia

Normalini Md Kassim (University Science of Malaysia, Malaysia) and T. Ramayah (University Science of Malaysia, Malaysia)
DOI: 10.4018/978-1-4666-2919-6.ch057
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Abstract

As a continually growing financial services of electronic commerce, Internet banking requires the development and implementation of a sound security procedure. The existing literature highlights security as the primary factor which determines the adoption of Internet banking technology. The secondary information on Internet banking development in Malaysia shows a very slow growth rate. Hence, this study aims to investigate risk and security requirements factors which influence the adoption of Internet banking application through the information collected from an interviews with managers from Bank M, Bank C and Bank P. The results reveal that the customers have great concerns for security and privacy issues in adoption of Internet banking. Hence, several methods of ensuring a more secure Internet banking was suggested like a two factor authentication and three factor authentication. For future research directions biometric techniques, such as fingerprint verification, iris or face recognition, retina analysis and hand-written signature verification are increasingly becoming basic elements of authentication and identification systems in order to be privacy-friendly, minimize the social risks and prevent misuse of biometric data.
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Internet Banking

Internet banking adoption in Malaysia is relatively low and very little research has been done to shed light on key adoption determinants. Though, electronic revolution has commenced in Malaysia but Internet banking is still in infancy stage. So, it is very difficult for the banking industry to design interventions that would enhance the diffusion of Internet banking (Ndubisi & Sinti, 2006).

While numerous studies have been undertaken to examine issues in the wider context of e-banking and customer loyalty, comprehensive research in the area of e-banking issues and customer preferences in the specific context of Malaysia has been rather limited. A study conducted examined the evolution of e-banking in Malaysia and analyzed the various electronic delivery channels such as automated teller machines (ATM), telebanking and PC banking (Balachandher, Santha, Norhazlin & Rajendra, 2000). Another study investigated the factors that affect the adoption of e-banking in Malaysia (Suganthi, Balachander & Balachandran, 2001).

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