Mobile Banking: Perceived Risks and Perceived Usefulness

Mobile Banking: Perceived Risks and Perceived Usefulness
Perceived risk is defined as “the possibility that online businesses might use personal information inappropriately hence invading a consumer’s privacy” (Nyshadham, 2000). With respect to perceived risk, two categories need to be defined – performance and psychosocial – with the risk category also having several additional dimensions: performance, financial, opportunity/time, safety, and psychological loss (Cunningham, 1967).

Recent research suggests that customers are highly concerned with the disclosure of their private information such that businesses might take advantage and inappropriately invade a customer’s privacy (Sathe, 1999).. Perceived risk is also influenced by trust, with trust working as an automatic mechanism in reducing a client’s perceived risk.

Privacy risk is important when consumers make payments online or using a mobile device. They are not sure if the important data will be secure in the hands of the institution when they engage in mobile banking transactions. This variable is important for the banks to understand, as there is a growing need to build up trust to reduce the perceived risk of the customer.

‘Perceived use’ is defined as “the degree to which a person believes that using a particular system would enhance his or her job performance, while ‘perceived ease of use’ is defined as the degree to which a person believes that using a particular system would be free of effort” (Samaneh Barati, 2009).

Research by Koivumaki et al suggests that increased user skills would trigger a more positive response and perception toward mobile services and increase the probability of constant service use. Thus, the importance of spreading awareness of the need for advanced technology skills among the general public cannot be overstated (Koivumaki, Ristola, & Kesti, 2008).