User acceptance of Internet banking in Indonesia: initial trust formation

Abstract

Most research on Internet banking adoption has focused on a limited set of determinants that influence users’ initial trust. This study takes the uncommon approach of separating the constructs of trust, perceived security, and perceived privacy to reveal the impact that each of these distinct factors has on initial trust formation. A large-scale survey of prospective Internet banking service customers in Indonesia was conducted and the results analyzed using a structural equation modeling approach. Perceived security, perceived privacy, relative benefits, company reputation, website usability, and government support are all factors that influence consumers’ initial trust of Internet banking. Banking firms interested in the expansion of online financial services in developing countries should enhance existing strategies or develop new approaches that account for these factors. Perceived privacy and government support had no impact on the intention to use Internet banking services in Indonesia.