Precautions for Safe Use of Internet Banking: Scale Development and Validation

Abstract

With the advancement of information technology (IT), almost all banks in India have now adopted electronic means of banking, popularly known as self service banking technology (SSBT), and have empowered their customers to perform transactions via automated teller machines (ATMs), Internet banking (IB), mobile banking, credit cards and debit cards. Although the popularity of IB has increased among banking customers owing to the convenience it provides, there are several risks associated with its use since it relies heavily on the open access Internet network, which increases the chances of online fraud and phishing. The specific objectives of the present study are (a) to develop and validate a scale for measuring the precautions taken by customers for the safe use of IB and (b) to examine the adequacy or otherwise of the precautions taken by IB users in Kerala, India. Through exploratory factor analysis, 16 items of precautions for the safe use of IB were reduced to six dimensions and were validated through confirmatory factor analysis. The findings have managerial implications for banks, as they will help them take necessary steps to safeguard their customers against the risks associated with the use of IB. It is essential that IB service providers educate their customers regarding the required precautions for mitigating the risks. The most important theoretical contribution of the study is the development and validation of a scale for measuring the precautions for safe use of IB.