Can Internal Control, Rules and Regulations and Technology Adoption influence Bank’s Protection of Customers’ Data Security?

Muhammad Haziq Al Hafiz Mat Yusof,Kamaruzzaman Muhammad,Erlane K Ghani,Saiful Anuar Sabarudin

doi:10.6007/ijarbss/v11-i9/10855

Muhammad Haziq Al Hafiz Mat Yusof, Kamaruzzaman Muhammad + Show 2 more

Open Access

https://doi.org/10.6007/ijarbss/v11-i9/10855

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Abstract

The emergence of the internet led to issues concerning privacy and data protection of the customers in the banking industry. Of consequence, the banks have initiated several strategies to protect their customers. Among the strategies adopted by the banks include implementing good internal control and rules and regulations. The banks also have adopted technology in protecting their customers. However, there is yet limited study that has examined these factors from the contexts of customers’ data protection of the banks. This study aimed to examine the factors influencing employees’ understanding of customers’ data security. Specifically, this study examined the effect of internal control, rules and regulations, and technology adoption on Malaysian banks’ protection of customers’ data security. Utilising questionnaire as the research instrument, this study obtained responses from 220 bank employees. Based on the multiple regression analysis, this study showed that internal control and technology adoption have a significant positive effect on banks’ protection of customers’ data security. However, this study could not provide evidence on the significant effect of rules and regulations on customers’ data security protection. The findings of this study highlight the importance of protecting the customers’ data security to financial institutions. They also underscore the significant impact of data theft on individuals and organisations since customers’ information or data is a precious commodity in today’s world.

Highlights

Technology plays an important role in the operations of a company, and the financial sector has been one of the biggest supporters of technological advances (Ghani & Said, 2010)
List of Item It is important for every party to be involved in protecting personal data as a legal socio obligation Enhancing customers’ data security helps to protect customers’ privacy and avoid unwanted interference Financial institutions obtain consent from the customers before proceeding to use the data for business purposes
It is important for employees to monitor and ensure that customers’ data is solely used for business purposes Financial institutions are responsible in protecting their customers’ personal data from any misuse or data leak Personal information obtained by the financial institutions is for internal use and not to be sold to external party All Items Internal Control

Summary

Introduction

Technology plays an important role in the operations of a company, and the financial sector has been one of the biggest supporters of technological advances (Ghani & Said, 2010). Zharova and Elin (2017), in their study, mentioned that banks are seriously considering the use of Big Data They further added that, in 2015, 11 financial institutions have used modern technology to analyse Big Data. The particulars may include his address, telephone number, identity card number, sex, and birth date Given their sensitive nature, these data should not be gained, openly transferred, or used without much control in daily transactions. This study examined the effect of rules and regulations, internal control, and technology adoption on the protection of customers’ data security by public banks in Malaysia. The findings of this study may assist the banks and other related parties in obtaining information and references on important values of customers’ information They could be a reference on how customer’s information or data could be protected.

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