Prospects and Challenges of E‐Banking In Malaysia

Abstract

Abstract The advent of the Internet has revolutionized the way banking is done. Realizing the importance of what is popularly known as e‐banking, in June 2000, the Central Bank of Malaysia allowed banks to conduct banking activities via the Internet. Four years later, almost all major local banks are providing e‐banking services. The aim of this paper is to provide an overview of e‐banking adoption in Malaysia. It begins by analyzing the local bank websites using a model introduced by Chung and Payter (2002). The study then examines the different types of e‐banking products used by adopters before finally describing the characteristics of e‐banking adopters. Five hundred and forty two usable questionnaire responses were received to a survey, of which fifty four percent were from e‐banking adopters. Most of the adopters took advantage of the service to carry out basic activities like viewing balance inquiries, obtaining summary reports of their transactions and using savings and current account facilities. A large number of the adopters used the e‐banking services when necessary, i.e. once a month to pay utility bills and accessed the facilities either from home or the office. Many were encouraged by friends and family members to use e‐banking. The study also illustrates that there were more adopters among the younger age groups, among those with higher salaries and those holding higher positions.

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