Abstract
Orientation: In the contemporary global business environment, online trading is a new distribution channel and trading platforms are products of investment and financial services companies.Research purpose: This study determined the influence of perceived risk elements on investor trust and the intention to invest in online trading platforms among students at a selected university in South Africa.Motivation for the study: The significance of how perceived risk elements may influence an investor’s trust and the intention to invest in online trading has largely been overlooked in previous research. Therefore, the principal objective of this study was to address this research gap.Research approach, design and method: A structural equation modelling (SEM) procedure was applied to perform the hypotheses testing using the AMOS (version 25.0) package.Main findings: All the perceived risk elements had a positive and a significant impact on investor trust as well as the intention to invest in online trading platforms.Practical/managerial implications: This study provides fruitful implications to practitioners. The collective knowledge on dimensions of perceived risk will be advantageous to managers in understanding consumer risk perception and how students attempt to reduce these risks. Hence, this will also help managers to implement risk-reduction strategies in order to increase the prospect of students investing in their online trading platforms.Contribution/value-add: This study stands to add new knowledge to the present body of investment management and financial management literature in Africa – a context that has not received much research attention in developing countries.
Highlights
In today’s contemporary business environment, most individuals are captivated by the idea of investing their money in online trading platforms (Barber & Odean 2013)
Despite the growing body of research on online trading platforms, there is still lack of understanding about the impact of perceived security risk, perceived privacy risk, perceived financial risk and perceived fraud risk on investor trust as well as the intention to invest in online trading platforms in Africa
Within the South African context previous studies have conducted their studies in various contexts by focusing on the relationship between foreign direct investment and economic growth in South Africa (Masipa 2018); a few South African cents’ worth on Bitcoin (Nieman 2015); the relationship between the exchange rate and the trade balance in South Africa (Chiloane, Pretorius & Botha 2014); responsible investing in South Africa (Viviers & Els 2017); familiarity bias among individual investors (De Vries, Erasmus & Gerber 2017) and a South African perspective on the investment performance of ethical funds compared to conventional funds and investor behaviour as regards ethical funds (Patel 2016). This shows that there is scant evidence of studies focusing on how perceived security risk, perceived privacy risk, perceived financial risk and perceived fraud risk impact investor trust and the intention to invest in online trading platforms in South Africa
Summary
In today’s contemporary business environment, most individuals are captivated by the idea of investing their money in online trading platforms (Barber & Odean 2013). These participants are fascinated by the idea that the forex market works by its own rules and has least transaction costs (Vasile, Teodorescu & Bucur 2015). Because perceived benefit has been empirically shown to significantly impact Internet adoption (Mehrtens, Cragg & Mills 2001), affect e-business adoption (Zheng et al 2006) and influence the corporate website adoption (Beatty, Shim & Jones 2001), using it in the technologydriven context of online trading is a rational undertaking. There is the risk of monetary loss because of transaction error or stock account misuse. The open nature of the Internet as a https://www.jefjournal.org.za
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
