CHAPTER 1

INTRODUCTION

1.0 INTRODUCTION

This research will present about the findings from a qualitative research that has

conduct the issues of privacy security in internet banking in Islamic banks around Kota

Bharu. In this chapter the rationale for this study is explained and an overview of the

study is provided.

This chapter will start by introduce the context which is this research was

conducted, namely background of the study, problem statement and research questions.

Then this followed by research objectives. Next, this followed by operational definitions

of terms, scope of study, the significance of the study and organizational of project

paper.

1.1 BACKGROUND OF THE STUDY

After almost four decades of their foundation, Islamic banks have figured out

how to position themselves as money related organizations not just assuming critical job

in asset assembly, asset distribution and usage however are effectively associated with

the way toward actualizing government monetary policy (Sole, 2007). Aside from

offering practically all customary financial offices, Islamic banks additionally

encourage domestic and international exchanges.

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 The Islamic financial framework in Malaysia depends on double or parallel

financial system, a structure which concurs interest-free and interest-based funding to

cope and exist together for credits and funding (Naser & Moutinho, 1997). Furthermore,

Sadler (1970) stated that the multi-religious and multi-social which is the one of a kind

parts in Malaysia lead to the Islamic financial likely to manage conditions where the

demand for and supply of surplus funds are never again made based on confidence

alone just as on different factors, for example as return on accessibility, deposits, and

the cost of financing. Moreover, this religious and non-religious essential the showcase

fragment of the Malaysian Islamic banking is accepted in the way that influence

execution as per adjustments in segment of the Malaysian Islamic banking investors'

asset report the executive’s organization (Sadler, 1970).

Prime Minister Tun Dr Mahathir Mohamad said,

“The application of smart technology within the financial industry

and financial technology (fintech) has positively disrupted the

industry, as well as other industries such as mobile payments, money

transfers, loans, fundraising and asset management. The latest

technology embraced by fintech leverages on the Internet, mobile

devices, social media integration, big data analytics and artificial

intelligence makes financial transactions more automated, user-

friendly and more convenient, thus (giving) a superior customer

experience. Fintech has also penetrated the Islamic finance space

despite it (the technology) being considered in a very early stage.

However, the potential disruptions to traditional Islamic finance

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 should not be underestimated. The disruptions can swing both

ways,” (Bernama,2019, April 10).

Today internet-based banking system is one of services that provides by the

bank as the accommodation towards the customer in performing deposit or withdraw

funds. Computer-generated or also known as virtual banks or "branchless banks" are a

commonly a new idea applied to typify banks that do not have a physical area, for

example, a subdivision, yet offer organizations just through the internet and ATMs to

deposit and withdraw funds (Sadeghi, 2004).

In internet-based banking or online banking, customers have straight access to a

bank's information system from work, school, home or wherever other spot where a

system association is available. In this new context, the customer is considered as an

end-client of the bank's information preparing structure. In end-client processing, the

customer's PC assumes a crucial job (Gerrad et al., 2006).

According to the previous study by Al-Sharafi et al. (2018), their findings are on

confidence absolutely affect the customers’ behavioral intention to accept online

banking services. Furthermore, the customers’ awareness, with their perceived-on

efficacy, security and privacy had an important impact on their trust. However,

customers’ perceived ease of use failed to foresee the customers’ intention to use online

banking services.

The study by Normalini and Ramayah (2017), provides researchers with the

implements to determine the possibility of biometric authentication technology in

internet banking. Experimental testing of the framework exposed fundamental insights

into the dynamics of the relationship between trust and its backgrounds by including

user perceptions of the effectiveness of biometrics authentication technologies. Largely,

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the results from this study underline the value of applying biometrics technology in

internet banking. Clearly perceived effectiveness of biometrics technology qualified the

relationships between perceived privacy and security with trust.

There already many researchers that run a research on this topic, but the research

conducted are majority towards conventional banks or both conventional and Islamic

banks in Malaysia. The research also usually is made in other country. The research on

internet banking system provided by Islamic banking is infrequently get attention from

the researchers. Therefore, this study is made to study on issues of privacy security in

internet banking in Islamic banks around Kota Bharu.

1.2 PROBLEM STATEMENT

Nowadays internet has become one of the most important parts of our daily life.

Since there are so many things can be done using the internet which help us to settle

things with little time and effort. In other words, it is making our life way easier. Today

internet is used for different purposes depending upon the requirement. So, in the side

of the financial institutions such as banks around the world they took the advantage of

the advancement of the internet by creating a platform which can attract consumer to

choose and use their services. This internet technology has twisted the way how the way

of bank delivering their services towards the customers and the attitude of the customers

towards adopting their banking desires. Internet banking(e-banking) has become the

most preferred services channel for the customers in doing their transaction. As stated

by Mansor et al, (2012), in the banking industries they are competing with each other to

give the best service and product to their customers. Most of the banking industries will

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provide and introduce e-banking approach in order to attract their customers attention to

use their product and services. By using the e-banking approach it will provides an

efficient distribution channel for the customers to make the transaction online.

E-banking becoming most popular choice when it comes to monetary

transaction not even in Malaysia but throughout the entire world seems to make online

banking is their number one choice. It is to be seen due to the passive development of

the world technology itself which indirectly leads the consumers tend to use online

transactions rather than manual transaction which going to the bank queuing at the

counter or line up at Cash Deposit Machine (CDM), Automated Teller Machine (ATM)

or Cheque Deposit Machine. Essentially, e-banking has become more benefit for banks

instead of towards the customers (Bachrany et al., 2014).

According to Al-Fahim (2013), security is the most crucial part in e-banking

service. It is because customers who are doing the transaction through banking web site,

they are not sure whether the transaction is successful or otherwise more to hacking of

the important personal information. When it comes to financial transaction, meaning

that it is involving several amounts of money that belongs to the customers that has

been entrusted to the financial institution to handle the money. However, the successes

of e-banking system were constructed by major factors of customer acceptance, and

confidence. Moreover, one of the biggest parts in e-banking system is the privacy

security itself. In e-banking, privacy security plays the role of securing the online

system from being hacked. Hence, this study concerns in the perspectives of e-banking

adopters on privacy security issues of e-banking.

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 There are several issues in the scope of privacy security which can be factors to

the safety of the e-banking systems failure which indirectly affect the confidence of the

adopters to adopt the online banking services provided by the banking institution.

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 As claimed by Dixit and Saroj said (1970):

“Security is simply the protection of interest. People want to protect their own

money and bank their own exposure. The role of government is to maintain

the integrity of and confidence in the whole system. With electronic cash, just

as with paper cash today, it will be the responsibility of government to protect

against system risk. This is serious role that cannot be left to the micro-

economic interests of commercial organizations”.

Internet banking is a borderless cyberspace where everyone can do almost

everything included irresponsible illegal things such as hacking the system, fraud,

stealing money and so on. There will be a lot of threats from the irresponsible people

who will try to bring down the security of the e-banking system for some bad intention.

The best e-banking security surely will attract attentions of the customers to adopt the

online banking services and customers will feel more secured. Additionally, definitely

people need to adapt and adopt the technological development so that they will be left

out in the community.

According to Klaus Schwab (2016), he said:

“All of us are responsible for guiding its evolution, in the decisions we make

on a daily basis as citizens, consumers, and investors. We should thus grasp

the opportunity and power we have to shape the Fourth Industrial Revolution

and direct it toward a future that reflects our common objectives and values.

To do this, however, we must develop a comprehensive and globally shared

view of how technology is affecting our lives and reshaping our economic,

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 social, cultural, and human environments. There has never been a time of

greater promise, or one of greater potential peril. Today’s decision-makers,

however, are too often trapped in traditional, linear thinking, or too absorbed

by the multiple crises demanding their attention, to think strategically about

the forces of disruption and innovation shaping our future”.

Thus, people need to be advance and always updated when it comes to

technology. In terms of internet banking the privacy security will play the most

important part in since everything is affected by the industrial revolution. This indirectly

will cause the internet security system to be more advanced in the line with economic

and industrial growth.

The most crucial part is when things that are involving the cyberspace where

people can easily reach other people information just by clicking their devices with a

little of expertise they had. So, it is really important for the institution to make sure the

authentication of the system provided. For example, the passwords and user

identification which used to identify users and will help to reach the goal of

confidentiality of a system. Furthermore, there should be an improvement from the side

of system development as technology getting great not to forget people also are getting

smarter to do the cybercrime for any kind of purposes.

According to Nadhirah (2018), writes:

“Malaysia's second largest bank CIMB on Monday17 December 2018.

“Denied that it suffered a security breach after several customers

complained on social media over the weekend that their accounts had been

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 hacked. In a statement, the bank assured its customers that the site remains

secure and all transactions are protected”. (The Straits Times, Dec 2018)

According to the CIMB privacy and security issue have been burst out on the

social media on 17 December 2018, which have been denied by them. But this issue

indirectly will make e-banking adopters feel uncomfortable and worried about the

security of their saved money in the bank. Thus, this also will affect others e-banking

adopters in others banks. Thus, the bank needs to update and streghten their systems

security in order to make sure their provided services will be accepted and trusted by the

adopters. This somehow will distract the trust of the adopters to the e-banking services

provided by the banks.

This research basically will examine the perception of the adopters on the e-

banking performance and does the implication of privacy and security of the system will

affect their choice to adopt the e-banking. Thus, this study will also decide the possible

action to overcome the issue occurred in the privacy and security of e-banking system.

1.4 RESEARCH OBJECTIVES

In general, the objective of this research is to study the adopter’s perception on e-

banking of Islamic banks in Kota Bharu performance on the scope of privacy and

security. While, in details this research would like to specifically study on these few

research objectives as follows:

i. To identify adopter’s perception on the performance of the e-banking on scope

of privacy and security provided by Islamic Banking in Kota Bharu.

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 ii. To analyse if adopters’ decision in choosing e-banking of Islamic banks in Kota

Bharu is affected by the implication of e-banking privacy and security of the

bank.

iii. To conclude the possible action can be taken to overcome the e-banking privacy

and security issue.

1.3 RESEARCH QUESTIONS

RQ1: How does the adopter’s perception of the privacy and security level of e-banking

in Islamic banks in Kota Bharu?

RQ2: How does the privacy and security e-banking level of Islamic banks in Kota

Bahru influence adopter’s decision in adopting e-banking?

RQ3: What are the resolutions of the complication of privacy and security in e-

banking of Islamic banks in Kota Bharu?

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Relationship between research objectives and research questions can be depicted in

Table 1.0.

Table 1.0: The Relationship between Research Objectives and Research

Questions.

Research Objective Research Question

i. To identify adopter’s perception on How does the adopter’s perception of the

the performance of the e-banking

privacy and security level of e-banking in
on scope of privacy and security
Islamic banks in Kota Bharu?
provided by Islamic Banking in

Kota Bharu.

ii. To analyze if adopters’ decision in How does the privacy and security e-

choosing e-banking of Islamic

banking level of Islamic banks in Kota
banks in Kota Bharu is affected by
Bharu influence adopter’s decision in
the implication of e-banking

privacy and security of the bank. adopting e-banking?

iii. To conclude the possible action can What are the resolutions of the

be taken to overcome the e-banking complication of privacy and security in e-

privacy and security issue. banking Islamic banks in Kota Bharu?

1.5 OPERATIONAL DEFINITION

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Internet Banking

Internet banking has been defined as “the service that allows consumers to

perform banking transactions using an electronic with an internet connection” (Lloyd,

n.d). Lloyd (n.d), explains that these transactions include checking the balance in one’s

bank account transferring funds between accounts and bill paying. Lloyd (n.d), also

defined internet banking as “an internet portal used by clients for different types of

banking services ranging from investments to payment of bill”.

According to Yousafzai and Yani-de-Soriano (2005), online banking is a

created from an innovative of procedures within the saving operators’ money,

delivering service to customers and finance industry. Online banking is virtual, cyber

banking and electronic. It is use as a system that enables customers to online and

completes their activities’ banking just at their home, through the personal computer,

portable computers or Internet as stated by Varela-Neira et al. (2010),

According to Shih and Fang (2004), describe online banking is a type of

system’s information that had uses from innovative resources of the internet and world

wide web to allow our customers to affect the financial activities in space of virtual.

Electronic banking is producing of services and information by banks to customers

through different consignment of platforms that used with another intelligent devices or

personal computer (Daniel, 1999).

Moreover, Keivani et al. (2012), suggested internet banking is an activity which

a customer can perform a transaction’s banking electronically without have visit a

counter institution. They agreed that electronic banking that operate seven day per

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week, 24 hour per day, to accessibility via a several of advanced information system.

Overall, this study defined internet banking is an electronic payment system that enables

customers of a bank or other financial institution to conduct a range of financial

transactions through the financial institution’s website because this statement

condensing all the definitions that stated above.

Islamic Bank

In view of Yahaya et al. (2014), Islamic banking is characterized as a financial

that offers Islamic framework and exercises that leaded by Islamic Shariah guideline

which worried on equity of assets conveyance and thoughts of social. The ideas of

Islamic Banking don’t worry for Muslimpreneurs yet in addition the majority of the

religion.

According to Khir et al. (2008), Islamic banking illustrates as an element

simply like its conventional function, for example profit making association with some

extra directive dependent on the uncovered sources. Haron et al. (2005) nevertheless,

focuses at Islamic banking underlying principles and philosophy in characterizing it;

that is Shariah-ruled and moral based activities and operation with extra social capacity.

In light of the above proclamation, this study characterized Islamic banking is a

financial framework that is reliable with the Sharia'a (Islamic law) and, thusly, an

imperative part of the framework is the forbiddance on accumulation riba and denies

exchanging money related hazard since this is viewed as a type of betting, something

illegal in Islam.

Security

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 Security is characterized as a risk which creates “circumstances, condition, or

event with the potential to cause economic hardship to data or network resources in the

form of destruction, disclosure, modification of data, denial of service and/or fraud,

waste and abuse” (Kalakota & Whinston, 1997). Security risks usually occur at the

network level (the server), the communication channel or the user’s personal computer

(the client). In the context of Internet banking, security threats can either be through

network, or data transaction & transmission attacks or through unauthorized access to

the account by means of false authentication (Yousafzai et al., 2005).

In extra, article entitled “An Exploratory Study of Factors Affecting the

Internet Banking Adoption: A Qualitative Study among Postgraduate Students.”

security recognitions are defined as "the emotional likelihood with which customers

trust that their private data won't be seen predictable with their certain desires" by

Hassan (2015). Hassan (2015), explained that security of exchanges over the web is a

consuming issue and it is a vital factor that customers consider before receiving web

banking. A few clients stay away from electronic banking as they see it as being

effectively powerless to extortion.

Another related examination by found that 73% dodged the adoption online

banking since they are worried about security and wellbeing of exchanges over the web.

In addition, he additionally derived that customers won't be prepared to change from

present natural methods for banking to web based banking except if their particular need

is fulfilled (Hassan, 2015). As indicated by the above explanation, this study

characterized that security in e-banking is the condition of being free from risk and

danger in customers using e-banking.

Privacy

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 Security, a noteworthy obstruction to web-based business (US Public Interest

Research Group, 2000), speaks to the control of exchange among clients and others

(ordinarily the destinations). This worry was talked about quite a few years back.

Margulis (2003), asserted that a definitive point is to limit powerlessness of the

individual information. With regards to internet banking, data security is characterized

as the case of people, gatherings, or establishments to decide when, and to what degree,

data about them is discussed to other people (Agranoff, 1991).

The formal definition for protection was considered by Avoine (2004), is with

the thought of debasement aside from on target labels. It was stretched out by Juels and

Weis (2007), who presented side channels: a foe could realize whether a peruses

prevailing to distinguish a tag. At long last, this study characterized privacy is the

correct that somebody needs to keep their own life or individual data mystery or known

just to a little gathering of individuals.

1.6 SCOPE OF THE STUDY

The research is to study the issue of private security in internet banking which is

an exploratory study of Islamic Banks in Kota Bharu, Kelantan. In order to gain an

accurate and satisfying answer for the proposed research, this research scope of study is

confined to security, privacy, authentication, divisibility, and technology among Islamic

Banks in Kota Bharu. It could be used to investigate the customer perception about the

Islamic bank industry in Kota Baharu, Kelantan.

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 This study has focused about the security of internet banking services. It is one

of the most important are of concerns in internet banking. Internet growth has offered a

system of flexibility to all of us, but it can also bring us vulnerable to new risks and this

risk we have to take care of.

This research was conducted among Islamic banking users in Kota Bharu. The

users can be the person who will use the internet banking services in Kota Bharu. They

have a lot of experience in using internet banking. Most of them use Internet banking

about transfer of funds as it can be done anytime and anywhere.

The method for this study is collecting qualitative data such as to explore of

Islamic Banks in Kota Baharu about the issue of private security in internet banking

through the methods of exploratory research and direct interaction of individual or

personal interview that is face to face interview with consumer’s internet banking in

Kota Baharu, Kelantan.

After the interview is done, this study will run the data analysis of using

ATLAS.ti version 8 method. This method using it for supporting analysis of data from

interviews. The feedback will be analyzed using ATLAS.ti version 8 because it is one

of the best tools to analyze the open responses and survey data.

1.7 SIGNIFICANCE OF THE STUDY

This research is focused on the understanding the issues of privacy security in

internet banking. Also, this study is important for an exploratory study of Islamic banks

in Kota Bharu to prevent their privacy security from cybercrime. The improvement of

16
their privacy security will provide clear image to the customers that their product is

secure to be used. Furthermore, this study will give opportunity for the researcher to get

knowledge towards current issues against cybercrime. Besides, the researcher can apply

all the knowledge and distributing the information to family, friends and relatives.

In addition, this study attempts to make customers believe in internet banking.

To our best knowledge, banks were tried to make the customer believe in internet

banking but failed. So that, banks could use the results of the study in order to improve

their privacy security from be hacking. Banks need to look initiatives to ensure this

problem for being worse.

Based on the result of the study, banks may improve their privacy security in

internet banking especially Islamic banking which is very significant for the existence

of the bank.

1.8 ORGANIZATIONAL OF THE PROJECT PAPER

There are three chapters were conduct on the research, here are the details:

Chapter 1 is the introduction to this report which contains research background,

problem statement, research objective, research question, operational definitions of

terms, scope of study, the significance of the study, organizational of project paper and

chapter summary.

Chapter 2 is a literature review of this research. This chapter reviews on

perception on the performance of e-banking, the implication of e-banking privacy and

17
security level and action from the bank that can be taken to overcome e-banking privacy

and security.

Chapter 3 is the methodology to conduct this research within the issues of

privacy security in internet banking. Its divided into sections which are research design,

data collection, data analysis method, research process, validity and reliability and

protocol of interview.

1.9 CONCLUSION

This research describes the background of the study, which is issued on privacy

and security in internet banking. Meanwhile, the statement of problem was dealing with

the issues of privacy, security in internet banking banks in Kota Bharu. As stated in this

research, there are three questions and objectives state in this study. There are also have

described about the important part such as operational definitions, the scope of the

study, significance of the study and organizational of the project paper.

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 CHAPTER 2

LITERATURE REVIEW

2.0 INTRODUCTION

The previous chapter discussed the background of the study and the problem

statement together with the research objective and questions of the study. In the first

chapter also consisted the operational definition, significant and scope of the study. This

chapter will provide a literature review of the study variables.

According to Chris Hart (2018), literature review can be defined as an

illustration of the current research on a specific topic or issue. It is based on the previous

research which related to the current research which can give guidance and idea on a

related information on a particular method and techniques. The review should discuss,

summarize, examine and explain this literature. A literature review should help the

researcher to determine the nature of research and provide a theoretical base for the

research. It will encourage the researcher to analyse, evaluate, synthesis ideas and came

out with best research output which originally by the researcher.

In this chapter, the researchers will further describe information obtained from

previous studies conducted that will support this review which consisted five themes

which are Technology, Customer Perception, Awareness, Trust and Cybercrime.

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2.1 TECHNOLOGY

Over the last decade, Islamic banking has increasingly gained acceptance

amongst market participants. This is because technology has improved the performance

of Islamic banking system for the better services.

A few analysts have differed that online service include more hazard than other

conventional exchange administrations (Tan, 1999; Martin & Camarero, 2008). Thus,

when somebody utilizes online administrations, probability his private safety may

likewise be imperiled. There is plenty of research accessible on job of realized danger

in compromising the personal behavior towards web banking use (Cheng et al., 2006;

Gerrard & Cunningham, 2003; Jayewardene & Foley, 2000; Littler & Melanthiou,

2006; Manzano et al., 2009; Sathye, 1999; Suganthi et al., 2001); however, there is

shortage of studies which have concentrated on Technology Acceptance Model (TAM).

So that, TAM model was 40% evidenced productive foreseeing the system use

(Legris et al., 2003). Davis (1985) purposed Technology Acceptance Model (TAM)

model in his doctoral research thesis. Davis (1985) in his conceptual model proposed

that system highlight capacities boost user encouragement that in response the main

impetus to utilize actual system. With regards to client acknowledgment of internet

banking services, ascertain effectiveness could be because of deal that improves

execution, spare time and increment adequacy of service or some or a few extra benefits

such as charge instalments, versatile revive. These advantages are additionally expected

further improving over some stretch of time through innovative progression or leap

forward. Numerous specialists have exactly demonstrated that ascertain effectiveness

apply a critical and constructive outcome on mentality towards utilizing IT or related

frameworks (Venkatesh & Bala, 2008; Davis et al., 1989; Venkatesh & Davis, 2000).

20
 According to Buzzacchi et al. (1995) have in their paper was studied about the

instance of Thai banking to attempt the theory of mechanical learning and the

innovative routine. Furthermore, this paper also concentrated on considering the

technological capacities of Thai banking and the learning procedure to amass

technological capacities. The model technological in the banking system according to

Buzzacchi et al. (1995) is gotten from an econometric research of Italian business

banks.

Tushman and Anderson (1986) contend that the procedure of technological

change represents discontinuities between the period of receiving old and new

technologies. They contend that the specialized change in banking shows progressive

attributes activated by the accessibility of dispersed information preparing and

information transmission systems. However, Hughes (1988) contends that there is no

such thing as radical development. This is because he takes a gander at the development

of extensive systems.

Conversely, Freeman and Perez (1989) contend that there are radical innovative

changes or discontinuities, most likely in light of the fact that in their view, technology

(for example IT) influences the providers of parts and changes their mechanical limits.

Von Hippel (1989) contend that advancing isn't constantly radical from the point of

view of inventive association, that there are steady enhancements through every

authoritative action.

Clarifying customer acknowledgment of new innovation is frequently portrayed

as a standout amongst the most experienced research regions in the current information

technology (IT) writing (Hu et al., 1999). Analysts in past year have moved toward

innovation acknowledgment from numerous dimensions. A few analysts have analyzed

21
this issue at the firm dimensions by surveying the connection between IT consumption

and execution (Banker et al., 1993).

Customers might be hesitant to receive internet banking of security and privacy

concerns (Lee & Turban, 2001). Absence of client trust, both in the traits of the bank

and in the general online condition has and remains a deterrent to the more across the

board selection of Internet banking. Clients’ trust is distinguished as a significant future

test for web banking (Aladwani, 2001). Banks can assemble commonly important

relationship with their online clients through a trust-based coordinated effort process

(Dayal et al., 1999). Nonetheless, the manner by which trust possibly pick up and the

effect it has on Internet banking isn’t yet surely known (Jones et al., 1999).

A few studies show that online financiers are the most gainful and wealthiest

fragment to banks (Mols, 1998; Sheshunoff, 2000; Robinson, 2000). On this premise,

no bank today underestimates the intensity of the online channel. Luxman (1999) for

example assesses that soon the online channel strengthens its significance particular in

the wide open, where banks have shut numerous branches.

In a study with thought to the technology of the significance of security and

privacy to the acknowledgment of internet banking has noted in numerous financial

examinations (Roboff & Charles, 1998; Sathye, 1999; Hamlet, 2000; Tan & Teo, 2000;

Polatoglu & Ekin, 2001; Black et al., 2002; Giglio, 2002; Howcroft et al., 2002). To be

progressively exact, privacy and security were observed to be noteworthy hindrances to

the selection of web-based banking in Australia (Sathye, 1999). Roboff and Charles

(1998) discovered that individuals have a frail comprehension of web based financial

security perils in spite of the way that they think about the threats. Besides, they found

the buyers normally depend that their bank is progressively stressed over security issues

22
and guarantee them. At long last, they fight that in spite of the way that purchasers' trust

in their bank was strong, their trust in development was delicate (Howcroft et al., 2002).

Lieberman (1984) has similarity contended that capital investment can be

interpreted as an ingestion of new innovation, with the admonition that the more explicit

the sort of capital ventures, the more substantial is the derivation about an association’s

utilization of information technology. An association's capital venture history and its

collected execution reflect amassed understanding, which thus mirrors a penchant to

allocate capital uses to new advancements. This contention is closely resembling that of

Amit et. (1989), who guarantee that a company's capital uses example will incite it to

back interior expansion through comparative capital consumptions programs. The lead

of these organizations is very unique in relation to firms that retreat to acquisitive

diversification.

Moreover, internet banking can be characterized as the utilization of innovation

to impart instruction and get data from a monetary foundation where a record is held.

Internet banking consolidates the framework that empowers budgetary establishment

clients, business to get the opportunity to record, or individuals, execute business, or get

information on financial things and administrations through an open or private

framework. Suoranta et. (2005), and Al-Sabbagh and Molla (1970) investigate the

different inhibitors and drivers of electronic financial reception. They accept there are

generally couple of exact examinations of the impact of electronic relying upon clients.

Consumer worries over internet security, protection, and trust have additionally

noted by various expert (Miyazaki & Fernandez, 2001; Gefen, Karahanna, & Straub,

2003; Nissenbaum, 2004). A study by Chung and Paynter (2002) distinguished

customer fears viewing exchange security as an inhibitor to the determination of

23
Internet banking. Security has additionally been recognized as a key purchaser worry in

other Internet banking selection ponders (Black et al., 2002; Siu & Mou, 2005). With

regards to buyer frames of mind toward Internet banking frameworks, trust might be

identified with customer judgment on security and protection issues (Wang et al., 2003).

According to Porteous (2006), developing countries increased utilization of m-

banking services requires extensive alterations to the demand and supply structure of

the monetary sector. As it were, network enhancement is required to advance the

structure and thought of m-banking services among banks; while better programming

and equipment suppliers, portable suppliers, customers, investors and regulatory

agencies are expected to help the recognition on the demand side, that m-banking is a

valued change in financial practice.

In m-banking, the buyers are probably going to put themselves in danger for

security infringement or technical failures while utilizing m-banking services. In

general, if m-banking applications and operations are adequately verified; then there

would be buyer trust in the banks. Thus, the achievement of adoption of m-banking

services is corresponded with the magnificence of mobile services providers. The

reason is because of the regular conviction by consumers that third party entities (i.e.

service providers) have the capacity of misusing their money (Morawczynski et al.,

2008).

2.2 PERCEPTION

According to Wall et al. (2018), customers’ perceptions are positively related to

their expectations of the service. Perception is a common thing which it is naturally

comes when it is related to human who dealt with something that will give good or bad

24
outcomes. Especially when the person is about making the decision either to use,

applied or adopt it. It is an active process that requires information processing and then

interpret it into message so that is how human got the idea of how their perception on

something. According to Hossain and Leo (2009), therefore, customer perceptions of

service quality can be used as a basic instrument in order to analyse the firm’s strengths

and/or weaknesses. The perception of the customers on business or specifically in our

case; e-banking service will give the illustration of the service whether it is good or

otherwise. According to (Hiltunen et al., 2002), the perception is the result formed

based on previous experience interpretation. Basically, after the users or buyers have

experienced the service, they will have their own thought on the provided service which

known as perception. There is a growing interest in understanding the users’ experience

as it is observed as a larger concept than user satisfaction. From this perspective,

assessing the user experience is essential for many technology products and services

(Wilson & Sasse, 2004).

According to Rustam et al. (2011) mostly customer perception is often identified

based on their satisfaction level towards specific product and services. While customer

satisfaction is usually measured in terms of service quality and service features offered

by an institution. There are various researches in measuring the satisfaction of

customers have been done, and it is happened due to increase in demand. Perception is

closely related to the customer satisfaction which it will give impact on the decision that

will be made by the customer. According to Xu et al. (2007) satisfaction of a customer

can be meet by fulfilling the need and wants of the customers towards the products and

services. If the products and services provided are good and satisfying the preference of

the customer this indirectly will give a huge amazing perception of the customers

towards the company or specifically the product. Referred to Hossain and Leo (2009)

25
based on the perception of consumers on the e-banking service of a bank, indirectly the

level of service of the institution can be predicted.

According to Eklof et al. (2016), Islamic banking sector in Pakistan is

dominated by the perception of shariah compliance which play a significant role in

customer satisfaction. In the Muslim country it would be the most important preference

either the company product and service comply with the Shariah or otherwise.

Customers will find the Shariah compliance institution to use and buy their product and

services, as this will give them satisfaction in choosing the best institution. In addition,

based on Eklof et al. (2016), stated that regarding to Islamic banks it is general

disposition of the identity of Islamic banking; when it comes to managing their issues

and mainly depends on the brand perception which created by the advertisement

campaigns by the institutions. In the research carried by Ahmad et al, (2002) stated the

three most important criteria perceived by Muslims in Malaysia towards the Islamic

banking institution in Malaysia; were the provision of a fast and efficient service, the

speed of transaction, and friendly bank personnel.

According to Paul et al. (2016), perception of a product’s performance will

come out with the comparisons process; where the perceived performance of a company

will be compared with the other perceived performance of another company. Then with

one or more standard of the other company compared will create an expectation. In

internet banking industrial perception of customers towards services will bring so much

impact to the company. As in this recent year there are many institutions offered

internet banking services to the users, an institution which have issues such as CIMB

bank will create bad perception in the adopter’s perspectives. Adopters will tend to

make comparison among the institutions that provides the internet banking services.

According to Haque et al. (2009), mostly consumers' perceptions are derived from the

26
set of technologies that are customarily visible to them over the Web. Regarding the

gender, the way how the customers perception and preference towards the e-banking

also different. Next, Malik (2017), stated regarding the time of delivery this is may be

because females are much sensitive towards timing and the delay even after the

promised delivery date is not liked by the females and they feel inconvenient (change in

the place of delivery may be the reason for females).

Based on studies which carried out by Eklof et al. (2017), stated,

“With better understanding of customers' perceptions, companies can

determine the actions required to meet the customers' needs. They can

identify own strengths and weaknesses, where they stand in comparison

to their competitors, as well as chart out future progress and

improvement paths. Customer satisfaction measurement helps to

promote an increased focus on customer outcomes and stimulate

improvements in the work practices and processes used within the

company”.

In terms of the companies who provides the services of internet banking, the

ability mastery in understanding the customers perception will help them to provide

services which meets the customers preference indirectly will attract and give great

perception to the consumers. Furthermore, the company will know their position in the

competition among others companies who in the same business, this will give them a

great opportunity to stand out and become the number one choice among others.

Customer perception is often identified by the level of satisfaction towards the products

and services offered by the institutions. According to Mokhlis et al. (2010), there are

27
nine factors were identified included (1) attractiveness, (2) people influences, (3)

service provision, (4) ATM service, (5) secure feeling, (6) marketing promotion, (7)

proximity, (8) branch location, and (9) financial benefits. Mokhlis et al. (2010), also

stated that interest of a person is closely related to the ratings of the factors, and

different ethnic group rated the factor as most important where the other ethnic group

rated the factor as less important. The factors that were more important to one ethnic

group were less important to other groups, resulting in a difference in how the factors

were ranked. Every individual has different perceptions to satisfy their needs and wants.

The level of satisfaction of customers comes from different factors, which the customers

have their own preference regarding the adoption of the e-banking services. Because of

the online shopping is in the internet, there is no physically meet up between the

customers and seller. So, according to Malik (2017), she said in the opinion of male and

female regarding considered online shopping costly specially due to there being no

chance of bargaining, the difference may be there because females are generally having

more negotiation skills as compared to men and they miss this in online shopping where

no negotiation can be done in online shopping due to lack of physical presence of the

online stores.

2.3 AWARENESS

According to Dixit et al. (2010), has in their research the aspect that are have an

impact on the use of internet banking services that is surrounded by consumers and also

show the degree of consideration concerning privacy and security issues in Indian.

Safeena (2011) in their research has verify that awareness relating the services of

internet banking. That is a major impact on the adoption of internet banking services

28
and satisfaction of customer. Next research have also verify by Srivastava (2007), that

relating about awareness. This is important thing that must be extra focused by

managers to make sure the customer is satisfy. This will build good image on internet

banking and among consumers. This will switch from retail in banking to internet

banking.

However, all banks must use e-mails, SMS banking, social networks and

brochures to increase of users’ awareness of mobile banking services. The efforts not

helping to decrease perception of consumers about the risk in using internet banking,

Kazi and Mannan (2013). Moreover, to construct the consumer about confidence in

security of internet banking. The banks also must give a adequate in refuge from

violation of privacy rights. According to Luarn and Lin (2005), by implement the

method in procedures that make improve the security or privacy of internet banking

systems.

Laforet and Li (2005), at China they have a study about the concern in the

acceptance of mobile banking and internet banking. This research also has found the

target of market on internet banking have find to become make a little by comparison.

In China the degree of consciousness in internet of banking services are very lower.

This issue riskier, among others is stand out as barrier to adoption of consumer in online

banking were attitude of consumers, safety that influence the risk, lack of knowledge in

use computer, Chinese hobbies carry the cash and the news technological skills.

According to Alsheikh and Bojei (2014), at Saudi Arabia the services of mobile give

ease way of use to users. They are many types of issues the acceptance of technology

attend. These issues are also include inadequate in experiences use technology,

strangeness using the technology inadequate of technology and awareness perceptions

of risk in using technology. Porteous (2006), at South Africa the knowledge and

29
information of mobile banking services availability to bank customers is inadequate. An

inadequate of both trust and awareness in the mobile banking are major the reasons for

the limited acceptance of internet banking.

According to Al Ghaith, et al. (2010), the awareness consumer of internet

banking services has a good effect on their decision to use the services in Saudi Arabia.

However, the questions regarding how consumers’ awareness of internet banking

services. The awareness can make an influence their intention to use services. There

was investigation of impacts that has effects on known or understanding and using the

services of mobile banking. It was proving the highest consciousness in using internet

of banking services. Riffai, et al. (2012), from their research have revealed mobile

banking services are easy to use and easy to understand thereby helping to shift from

banking. The research of Al-Somali et al. (2009), have stated that the consumer

awareness can shape the perceptions of mobile banking use in Saudi Arabia.

Mohammadi (2015), have stated that awareness the impact users’ perceptions in

Iranian. That ease and usefulness of internet banking. The research of Howcroft, et al.

(2002), have reveal the impact of awareness that relating using of internet banking

services on raised using on internet of banking. Customer must know and understanding

the services on online banking. This has provided through the banks what and how

customers can be using it. If consumers realize of the information about the internet

banking, the advantage of internet banking and a ways in use this services. So,

consumer more ready to using the internet banking. According to Sathye (1999), at

Australia all banks have a great responsibility in managing the banking system well.

They need to be constantly aware and regularly update the banking system. There is

evidence that most people do not know or are well versed with the risks or benefits of

using online banking services. Build awareness of products and services among

30
customers. Chung and Paynter (2002), that is very essential that give a big impact for

rise the satisfaction of consumers. This will lead rise the performances on internet

banking.

The study by Gerrard and Cunningham (1997), Muslims in Singapore and non-

Muslims has contrast among them. They have a diversity of attitudes to Islamic

banking. This research to has that a small proportion of Muslims have an interest in

recognizing the concept of Islamic banking. But non-Muslims almost do not have

enough awareness in Islamic banking. Malaysians and Singaporeans have similarities,

both of these countries do not have much difference in their Islamic and non-Muslim

banks in the selection of criteria. Inadequate of knowledge about the mobile banking.

Some of respondents were unaware of what they needed to be done to become a user in

internet banking. Sohail and Shanmugham (2003), identifying accessibility within the

Internet, awareness, privacy concerns, consumer trust in using bank services, facilitating

the use of Islamic banking is a major impact on the use of mobile banking. Tan and

Teo’s (2000) has three aspects of consumer behavior, which illustrates consumer

awareness of e-banking, Furthermore, subjective norms. Which illustrates the social

impact that can be affect the user's motives for using Internet banking and ultimately,

recognizing in control of behavior, which explain the anticipate of having the primary

source for adapting to mobile banking.

2.4 TRUST

Trust is a convoluted and many layered ideas with various factors that can be in

consistent change. Trust has gotten significant consideration in the electronic business

setting. Trust has been found to influence client appropriation of different

31
administrations, for example, online news administrations (Chen & Corkindale, 2008),

Electronic banking (Flavian et al., 2005), wellbeing websites (Fisher et al., 2008), and

mobile shopping (Lu & Su, 2009).

As indicated by Bhattacharya et al. (1998), researcher in various discipline

have seen trust along various dimensions. Identity analysts will in general view trust as

an individual trademark while social therapists will in general view trust from the angle

of behavioral desires for others engaged with transactions. Economists and sociologists

will in general focus on how institutions are set up and impetuses are utilized to

diminish vulnerability related with transactions among relative outsiders. Kim and

Prabhakar (2000), discussed that it is important to integrate the various perspectives on

trust crosswise over disciplines and set forth that trust might be a "meso" concept,

which incorporates both the individual and institutional dimension perspectives on trust

improvement. Trust as expressed by Aghdaie et al. (2011), can be grouped into several

type, while interpersonal trust is established between online customers and merchants,

institutional trust is established between the computer and consumer.

According to Rempel et al. (2001), examines into the idea of trust began with

the investigation about personal relationships. In the zone of social brain psychology,

trust also viewed as a natural normal for any profitable social interaction. Moreover, the

idea trust, motivated by human science (Lewis & Weigert, 1981), financial matters

(Dasgupta & Gambetta, 1988) and the board (Barney & Hansen, 1994), entered into

marketing writing following the social introduction emerging in advertising programs

(Dwyer et al., 1987)

Trust is a key middle person in each business relationship and must be a

central focus of any organization associated with administrations (Morgan & Hunt,

32
1994; Kantsperger & Kunz, 2010). According to Berry (1983) perceives, marketing

relationship is based on the establishment of trust. Trust referred to the client's appraisal

that she or he could have depended on the electronic banking to guarantee the welfare

and security of the client's online transactions (Holsapple & Sasidharan, 2005).

2.5 CYBERCRIME

Thomas and Martin (2006), stated that electronic deceit was largely a local,

cottage industry and inefficient of a usual card fraudster ran a vertically-integrated on

small business. Assembling of statistics on ‘cyber’ crimes began in 2000 with the

creation of a technology division within the Commercial Crimes Department of the

Police and the enactment on certain ‘cyber’ legislation for examples the Digital

Signatures Act 1997, Computer Crimes Act 1997, and the Communication and

Multimedia Act 1998. Based on Riek (2015), cybercrime is a inescapable danger for

today’s Internet-dependent society. Though the real level and economic impact is hard

to measure, officials and scientists agree that cybercrime is a massive and still rising

problem. These types of misconducts have become progressively problematical over the

previous 15 years, with the initiation of online banking and the explosion of electronic

funds transfer systems (Smith, 2010).

The meaning of cybercrime is defines in different terms. Broadhust (2014), told

that cybercrime is usually discussed as a criminal activity related with technologies and

computers committed toward the internet. More et al. (2016), they said that cybercrimes

are an attack from one computer to other computers using the network intentionally to

modify, disrupts, repudiate, degrade or damage or destroy the data accommodated in the

attacked system or network. Thomas (2006), stated that cybercrime is an online

33
irritation that derived by unprofessional hackers who ruined websites and engraved bad

software in pursuit of bragging rights.

These cybercrimes do interrupt the organizations system. Based on research

made by Broadhurst (2014), the offences cover hacking, virus writing, fake withdrawals

of cash using fake Automated Teller Machines; ATM cards, online credit card fraud as

well as offences such as defamation, false allegations and discrediting another via the

internet, use of counterfeit access devices installed at ATM machines, credit card point

of sale terminals and phishing or identity theft. This is because the category of crimes

covered under term of cybercrime is slightly wide. Other research runs by More et al.

(2016), The interrupter interrupts by creating a spiteful code which is fixed against a

computer processing code or logic. These spasms are made in a way to take the

important information without leaving back any hints of interruption. Thomas and

Martin (2006), revealed that the hacker is influencing with buy a card-encoding

machine, get a work in a shop where he can duplicate customers’ cards, and then go out

at night to snip cash from ATMs which this deed as one of their way to do crime.

Similarly, electronic fraud might have involved a call-centre operative in bring together

the password data for use by the co-conspirator. However, now criminal networks have

developed online black markets in which the bad guys trade by each other, with

criminals compelling on expert roles.

The cybercrimes do give many impacts to the systems and banks. A

considerable division of cybercrime’s generally costs to society can be drawn to indirect

opportunity costs, subsequent from unused online services (Riek et al., 2015). It is tough

to evaluate their effect, and both financial costs and intangible losses can be recognized

said Wall, (2008); (Lagazio et al., 2014). Approximations are impressive, with a cost of

nearly £2.5 billion in the UK alone (Cabinet Office & Detica, 2011), even if it has to be

34
worried that these estimations have been critiqued because of their low level of

trustworthiness (Kshetri, 2010).

From the five themes stated above which are theme of technology, perception,

awareness, trust and cybercrime, the researchers have run the research on criminal

action related to technology and computers devoted on the internet. The researches are

about how technologies, perception, awareness, trust and cybercrime effect the security

and privacy issue on e-banking.

The research are on how the cybercrime take place in online banking with the

help of technology and how the criminal do the interruption towards the system and

how it affects the customers and banks.

Therefore, there are diverse analysts have set diverse criteria to get to the level

of perception of the customers. However, there are still lacking of customers attitudes

and perceptions towards Islamic online banking services. Thus, based on the reviews of

the literature, regarding the perception, researchers noticed that there is also lacking of

Malaysian perception of Islamic banking in Malaysia. Current research has been

conducted to evaluate the perception of the e-banking of Islamic banking in Kota Bharu,

Kelantan.

The research will be held in Kota Bharu, Kelantan because previous researches

are made from other country and some research is made for whole Malaysia. There is

no research made specific for banks in Kota Bharu, Kelantan. Then, the researcher

founds that majority in previous researches are made for conventional banks and some

of them includes both conventional banks and Islamic banks but there is no research

that review specific research on cybercrime of internet banking for Islamic banks.

35
 2.6 FRAMEWORK

ISSUE OF PRIVACY SECURITY IN INTERNET BANKING

Technology Perception Awareness Trust Cybercrime

Issue of Privacy Security in Internet Banking: An Exploratory

Study of Islamic Banking in Kota Bharu.

Possibly Actions to Overcome the Issues of Privacy and Security e-

Banking.

Legend:

Has been studies

Will be study

Figure 2.0: Research Framework of Issue of Privacy Security in Internet Banking: An

Exploratory Study of Islamic Banking in Kota Bharu.

36
 Based on Figure 2.0, the aim of this study is to analyst how important the

privacy security in Internet banking among customer. This study starts to look at the

internet banking and the customer itself. Internet banking was increasingly in demand

by the customer nowadays. Most of people was chosen Internet banking because they

believe this kind of systems will secure their saving.

Many previous researchers have discussed about issues that related with privacy

security in Internet banking. So that, researcher found that there are several themes

related with this issue. The themes were technology, perception, awareness, trust and

cyber-crime. This means that bank needs to ensure the privacy security of customer.

Researchers find the solution that the bank has to take a possibly action to

overcome the e-banking privacy of security issues to prevent the issues from happening

again.

37
2.7 CONCLUSION

The second chapter is the literature review part. Literature review is a critical

review of literature that related to the topic of the research. Firstly is the introduction.

Secondly, will discuss about the literature review of this research, the literature review

begin with technology in online banking, customer perception in internet banking,

awareness in online banking, trust adoption, and cybercrime in online banking. Next, in

the literature review also contain research gap.

Lastly, is the theoretical research framework which is divided into five theme

groups of internet banking privacy and security. Firstly are technology, and following

with customer perception, awareness, trust, and lastly cybercrime in Kota Bharu,

Kelantan. The theoretical research framework will illustrate the relationship between

internet banking privacy and security and themes among the internet banking users in

Kota Bharu, Kelantan.

38
 CHAPTER 3

RESEARCH METHODOLOGY

3.0 INTRODUCTION

This chapter is the research methodology that will give the detail description of

the step to be taken in carrying out the research project. This chapter contains six main

sections, begin with the introduction and follow with the research design that will

explain the research design that is chosen for the research. Research design is a set of

method that the researcher needed to follow to fit the research objective or test the

hypotheses, its use to ensure that the evidence generated from data would be able to

answer the research questions.

Next, the data collection method is explained in advance about the method of

the data collection such as from primary data and secondary data. Then it continued

with the data analysis method that is the detail explained of the technique to analyze the

data obtain. These are two important considerations that must be made with any type of

data collection.

In this study also used the concept of validity and reliability. It is to know how

to minimize the possibility of mistakes and tendencies by maximize the reliability and

validity of the data. Last but not least, this research continued with research procedure

and protocol interview. Lastly, the conclusion will conclude all the detail in chapter

three.

39
3.1 RESEARCH DESIGN

This research is conducted with greatest authority over factors that may

interfere with the legitimacy of our findings. Research design is a plan that constructs

when, where and how information are to be gathered and analyzed (Parahoo, 2014). It is

also a researcher’s by large to answer the research question or testing the research

hypothesis (Van et al., 2001). Because the purpose of this study is to identify adopters’

perception, to analyse adopters’ decision in choosing e-banking of Islamic bank and to

conclude the possible action to overcome the privacy and security of internet banking

issues among e-banking user in Kota Bharu, Kelantan, then qualitative research is

suitable for this research.

3.1.1 QUALITATIVE RESEARCH

This study applies qualitative method to obtain data. There are some definition

that can be taken from other researchers. Among them Huberman and Miles (1994),

who stated qualitative research is led through an intense and delayed contact with a

“field” or life circumstance. These situations are commonly “cliché” or typical,

intelligent of the regular day to day life of individuals, groups, societies and

organisation. Barbour (2005), suggested qualitative research as a type of systematic

empirical inquiry into significance. He discussed the systematic refers to arranged,

ordered and open and must be pursued and accepted by the individuals from the

qualitative research community. Then, empirical implies that this kind of request is

stood in the global of experience. Qualitative research design is in accordance with

exploratory studies (Crawford, 2006). Yilmaz (2013), also stated qualitative research an

emerging, naturalistic, inductive, and interpretive approach to examine people,

40
phenomena, social, cases situation and process in their natural state to reveal in

descriptive trem the meaning attached to their experience in the global.

According to Denzin and Lincoln (2005), defines that qualitative research

involved an naturalistic and interpretive which the research is led in their natural

settings. Morse (1991), stated without concentrating on the particular ideas, researchers

can understand human lived experiences by approaching the person-centred holistic and

humanistic. The researcher’s participation in the research added to the uniqueness of

data collection and analysis (Streubert & Carpenter, 1999). Since human begin don't

generally act predictable or logically, complete objectivity is impossible (Holloway &

Wheeler, 2002).

Findings produced from qualitative research do not collected by factual

methods or different methods for quantification (Strauss & Corbin, 1990) but arrived

from real-global settings that pursued the phenomena naturally (Patton, 2001). It is a

naturalistic approached regarding the understanding of how the phenomena work in

context-specific settings. The researcher does not endeavor to manipulate the

phenomenon cycle (Patton, 2001). Differ from quantitative research that seeks causal

determination, predictable and speculation of findings, qualitative researchers look for

rather illumination, understanding, and extrapolation to comparative situation (Hoepfl,

1997).

Based on the above statements, it is clear that studies related to the

implementation process generally apply qualitative research methods that involve

thorough description and deep understanding of the phenomena studied. This study use

qualitative approach to explore the experiences, perception, perspective, behaviour and

feelings of internet banking user towards the issues of privacy and security in internet

41
banking and emphasize the comprehension of these components. The method of

reasoning for utilizing a qualitative approach in this study was to explore and portray

the opinion of online banking user in Kota Bharu, Kelantan on the privacy and security

in internet banking especially Islamic banking. It was an appropriate method to gather

the opinions of them regarding the effects of the privacy and security in internet

banking. Following are the methods used:

I. EXPLORATORY RESEARCH

According to Polit et al. (2009), exploratory examinations are

undertaken when another zone is being researched or when little is known about

an area of interest. It is utilized to research the full idea of the phenomenon and

different factors identified with it. Filstead (1979), also stated the primary goal

of this method is to a suitable method to give ground work for later more

rigorous studies sometime in the not too distant future. In this research, the

opinion of internet banking user in Kota Bahru, Kelantan regarding the privacy

and security of internet banking were explored using an interview. Although this

paper has been led on the privacy and security of internet banking, little is

known about the user of online banking opinion towards Islamic banking

especially in Kelantan.

II. DESCRIPTIVE RESEARCH

Descriptive research is defines by Burns and Grove (2005) as a design

to give an image of the natural surroundings. It is used to explain the current

42
 practice and make conclusion by developing theories. According to Creswell

and Clark (2017), has discussed that in order to conduct a thorough review of a

phenomena, researchers need to select participants and research sites purposely.

For the aim of the this research, descriptive research this study used to obtain a

picture of internet banking users’ opinion of the privacy and security internet

banking with a view to improving the safety and security of internet banking.

III. INTERVIEW

Based on Kvale (1994), a qualitative research interview seeks to

cover both accurate and a significance level, however it is normally

progressively hard to interview on a meeting level. He also explained that the

qualitative research interview looks to portray and the implications of focus

themes in the existence universe of the subjects. The principle task in

interviewing is to comprehend the significance of what the respondents state. In

this study, interview is used to further investigate regarding the privacy and

security of internet banking among the electronic banking user in Kota Bharu,

Kelantan.

A qualitative research interview should cover accurate and a meeting level,

usually the meaning level is difficult to achieve, needs to describe the themes in

the life world of the subject (Kvale, 1994; Gall et al., 2003; Creswell, 2007).

Interview help to gain information regarding the respondent’s encounters and

interviewer can seek after detail information about the theme (Kvale, 1994; Gall

et al., 2003; Creswell et al., 2017). Interview is especially helpful for getting the

story behind a members’ encounters. The interviewer can seek after in-depth

43
 information around the topic. Interviews might be helpful as follow-up to

specific respondents to questionnaires, example to additionally research their

responses (McNamara, 1999).

This study decided to choose six online banking users with varies

background individuals as the respondents for interviewing. In the interview,

this study will ask whether they are familiar with internet banking, how do they

know about e-banking, do they know about what privacy and security of online

banking, do they think online banking is safe and important in future, how does

the privacy and security e-banking level of Islamic banks in Kota Bharu

influence user’s decision in adopting online banking.

3.2 DATA COLLECTION METHOD

This study using two methods for data collection in qualitative. Firstly, primary

data, the researcher use research survey which is personal interview and the secondary

data, the researchers will examine book, journal, conference paper and newspaper and

so on.

3.2.1 Primary Data

Primary data is the first source of data. The original data collected specifically to

answer the research questions. The data gathered by the researchers themselves to test

the hypothesis in its study. It is not available as a file. Then, the sources of data are

usually gathered through experiments or field studies. For an example are observations

and interviews. It can be gathered from individuals, focus groups or expert panels. In

44
the principle, there are two primary data collection methods, namely the collection of

passive and active data (Oghenerukeybe, 1970). Active data is data that need to request

from a user. The user needs to actively provide this data while passive data is data that's

collected without asking the user for it, via some other means. The goal by conducting

primary data is to experience something new that can be proved by others and to stamp

out our own biases in the process to get the data (Driscoll, 2011).

In this research, the researcher will use an interview to collecting the data as a

primary data method. When designing an interview, the researcher must ask a question

that can generate as much as information about their studied. There are a few types of

interviewing styles to choose from structured interviews, semi-structured interviews,

and unstructured interview. A structured interview is a type of interview in which the

interviewer asks a particular set of predetermined questions, while the semi-structured

interview is a hybrid of the previous two types, which means that some questions are

predetermined, while others arise spontaneously in a free-flowing conversation

(Schmidt, 2004). An unstructured interview is a type of interview in which the

interviewer asks questions which are not prepared in advance. Interviews can be

conducted through the internet, telephone or face-to-face interaction or to be more

informal conversations conducted for research purpose (Paradis et al., 2016).

Face to face communication interview involves two ways communications

between interviewer and respondents. This type of interview normally is constructed in

a planned manner and usually called as ‘structured interview’. This method is an

information accumulation technique when the questioner specifically speaks with their

informant (Sturges & Hanrahan, 2004). The purpose of conducting this method is to

explore the responses of the people to gather more and deeper information. The

interview session also must be able to devote the aim and objectives of the research

45
(Gill et al., 2008). Telephone call is the easier way to collect the data because it is easy

to schedule an appointment with the informant and it also can reach the informal

although from a far.

The reason for the interview is to investigate the perspectives, encounters,

convictions or inspiration of people on particular issues. Prior to an interview happens,

informants are supposed to be educated about the examination points of interest and

gives confirmation about moral standard (Devlin & Gray, 2007). Informants need to be

questioned about the investigation after the meeting has wrapped up.

In this research, the researcher has selected only online banking users in

Kelantan. The researcher has chosen this type of informants is because the researcher

wants to collect the best and the multiple answer to finish this research. The researcher

applied semi-structure interview because the respondents spontaneously answer the

researcher questions. Also, researcher utilize face to face communication to ensure the

information is pure.

Secondary Data

Secondary data is data generated as a result of past research. This data differs

from primary data, where the data is collected by the investigator himself either from an

interview or observation. Secondary data also provides reliable facts to support the

research of every researcher. Secondary data also supports research involving large

groups as data can be collected from various sources (Ritchie, 2013).

The information or the derivative material collected by the individual or other

researchers, not the researchers currently studying. Examples of secondary data are

examining book, journal, conference paper and newspaper and so on. The secondary

46
data that used to conduct this research include journals from database and academic

textbook such as Emerald, ProQuest, Science Direct, Google Scholar, My Athens,

Research Gateway and Yahoo.

For secondary data, researcher collects the data from journal, newspaper and

book. Researcher use secondary data to take a data or reference that related to Islamic

banking knowledge. This is due to study that issues privacy security is very important in

internet online nowedays. This related to the CIMB banks that be hacked. So, researcher

used secondary data to gather the information.

3.3 DATA ANALYSIS METHOD

The data collected in the study will be analysed using based on content analysis

and supported by using ATLAS.ti software program to ensure the validity of the

information examined in an effective way. In this study, the data will be collected by

using existing resources such as books, articles and journals then it is considered as

secondary data. Moreover, the interview data also used ATLAS.ti.

This is due to the study conducts new research properties, exploration research is

more appropriate through interviews and documentation analysis for better

understanding of this study. The method used in analysing the data for this study is

description of interview and documentation analysis.

3.3.1 Interview

Interviews are the method that requires subjects and researchers to attend along

with the process of acquiring and collecting information. The information studied will

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be directly obtained by researchers from direct sources. Any information gathered

during the interview must be record because any answers mention by the respondents is

an important data to be observed and analyses. According to Kahn et al. (1957), the

interview method was more appropriate to obtain in-depth data than the method of

questionnaire. Interviews can be overall strategy of research data collection or may be

one of the techniques used in the study.

Moreover, this study uses the Boyce and Neale (2006), approaches that

emphasize in-depth interview methods aimed at getting answers to questions and

achieving targets on the objectives of the study. In this study, the researcher will

conduct interviews with related parties is those directly in the privacy security among

the online banking users in Kelantan.

3.3.2 Documentation Analysis

Documentation analysis is a type of qualitative research in which documents are

reviewed by the analyst to access an appraisal theme. Document analysis is a social

research method and is an important research tool in its own right, and is part of most

triangular schemes, a combination of methodologies in the same phenomenon study

(Bowen, 2009). Documentation analysis is a part of secondary data.

There are many reasons why researchers choose to use document analysis. This

is because, documentation analysis is one of the most efficient and effective ways of

collection data as the documents can be handled and through practical sources. Getting

and analyzing documents is often more efficient when conducting your own research or

experiment (Bowen, 2009).

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 ATLAS.ti version 8 is a powerful workbench for the qualitative analysis of large

bodies of textual, graphical, audio and video data. Sophisticated tools help researcher to

arrange, reassemble, and manage researcher material in creative, yet systematic ways.

ATLAS.ti keeps researcher focused on the material itself. ATLAS.ti meet researcher

qualitative analysis needs.

i. ATLAS.ti 8 software program

ATLAS.ti Version 8 comes from the German word "Archiv für Technik,

Lebenswelt und Alltagssprache" or in English means "Archive for

Technology, the Life World and Everyday Language". There is an

addition .ti after ATLAS which means "Text Interpretation". So the term will

be "Atlas tee eye". The ATLAS project (1989-1992) is run by the Technical

University of Berlin and this project is the prototype of this software. Only

in 1993, the ATLAS commercial version was generated under the name

ATLAS.ti. Version 8 (Wickham & Woods, 2005).

ATLAS.ti Version 8 as another CAQDAS is built to help researcher

systematically unravel the story behind qualitative data. The main task of

ATLAS.ti Version 8 is to provide tools to facilitate coded process and

categorized according to visual and network themes for interpretation

purposes.

There are six main entities in ATLAS.ti Version 8 namely Documents,

Quotations, Codes, Memos, Networks and Links with each of these entities

have their own manager which are the researcher will use. Researcher need

to create a new project in Atlas.ti Version 8 and all the materials needed to

store in ATLAS.ti Version 8 project folder. This project will display all data

sources and save the code, and whatever researcher builds during the course

49
 of the study. Data sources in qualitative research are researcher will usually

use is documents which is articles, interview transcripts, books, reports,

newspaper clippings, video and audio recordings, short print materials or geo

data (Rademaker, et al., 2012).

However, researcher needs to know the main term in ATLAS.ti Version

8. An entity refers to code, code groups, quotation, quotation groups,

document, document groups, links, link groups, links or link groups.

Documents are all types of files that you want to analyze in projects such as

pdf files, texts, photos, videos, audio and geo documents. Quotation is the

selected or marked segments of the document that contain important

information. Codes are the paragraph or short statement or quotation given

to the segments which represent the meaning of the segment. Memos are a

reflector of the reflective idea of the researcher that arises during the process

of analysis. A network is the Linkage between all entities presented in the

form of graphical links to visualize the meaning of the association. Groups

are the classification of entities, whether documents, quotations or codes in a

group. Links are Shows the code-coding association. Hyperlinks Shows the

association between quotation-quotation (Meanwell, 2018).

3.4 VALIDITY AND REALIBILITY

According to Patton (1994), it state that reliability are two factors where

qualitative researchers needs to be given attention when researchers do the study,

analyses result and evaluate the quality of the study. Besides that, Seale (1999) also

stated that create a good quality study through credibility and validity in qualitative

50
research, states that the “belief of a research report lies in the middle of issues

conventionally discussed as validity and reliability”.

The study by Fraenkel et al. (1993), validity is the precision, verity and usability

of the tools that enabling the information to be handled. Furthermore, Campbell and

Fiske (1995) have state that validity is also implies an agreement between two attempts

to measure the same nature with the maximum in different ways. To measure the

accuracy of the measure in this study. Validity will be used to ensure that the measure

or indicator used completely consist all characteristics or ideas in a measured concept.

However, reliability relates to the stability or consistency of a concept in

measuring or measuring tools or surveys or questionnaires across the future of an idea.

According to Marican (2005), the purpose of the use this reliability is to determine

whether the measure can provide the same answer to measure the same concept to the

same population or sample or informant.

Messick (1989) have stated that validity was evolve a complicated of concept.

That is because it are more related to the conclusion according on the result of

assessment. That are more focus on the result of the speculation that make implied it.

This appraising consideration must need to be accurate and declaring the truth. The

assessment or evaluation should not be valid, that only the assumption about this

evaluation.

Besides that, Borman (1977) have stated that reliability is intended as a

consistent measurement or accuracy of measurement. This is to measure the extent of

consistent score answers made in the test. It can also illustrate a consistent value

obtained by a set of same testers when given the same test at different times.

51
 According to Creswell and Miller (2000), researchers of qualitative have an

opinion that the truth of the term validity is does not apply to research for qualitative.

But these researchers are still aware of the need for in-depth review or qualification

checks for each of their research. Researchers are also recommended that the validity is

have an effect on by the perception of researcher about of validity in the study and

choose of paradigm assumption.

However, according to Stenbacka (2001), in the quantitative approach of

reliability can be seen as a "purpose to explain" and in a qualitative approach it can be

seen as a "generate the understanding". It has a difference in the aim of assessing its

quality of a study in quantitative and qualitative research is one of the causes that

reliability concept is not relevant in study of qualitative. According to Stenbacka

(2001), the concept of reliability can even be confusing in research qualitative. If

qualitative studies are discuss accompanied by reliability as a result of which the study

may have been unfavorable.

This study has used the concept of reliability and validity. Thus, researchers

have used these two methods by interviewing the informants and compare the results

obtained with alternative proof. Besides that, this study also using these methods to

verify the scores supported by their understanding of the construct that have been

measured. The consistency of record is going to be attained once the steps of the

analysis are verified through examination.

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3.5 RESEARCH PROCEDURE

The procedure of the research portrays the travel process of a study as a whole.

Figure 3.0 is a description of the procedures for the process study of this research. The

research process is expanded into three phases, namely the first phase is the initial stage

of the study such as the preparation of documentation towards the construction of

research proposal. The second phase is also a process for determining the methodology

of the study to be used in this study. While the third phase is about process of the main

objective of this study is to understand, evaluate adopter’s perception on the

performance of the e-banking on scope of privacy and security provided by Islamic

Banking in Kota Bharu.

Phase 1: Process for Preparation

 Get related materials such as books, journals,
articles and more.

Phase 2: Process for Determining the Methodology

 Conceptual framework of study.
 Determine the research method.

Phase 3: Process of Main Objective of This Study

 Identify adopter’s perception on the performance of the e-
banking on scope of privacy and security provided by
Islamic Banking in Kota Bharu.
 Analyze if adopters’ decision in choosing e-banking of
Islamic banks in Kota Bharu is affected by the implication
of e-banking privacy and security of the bank.
 Conclude the possible action can be taken to overcome the
e-banking privacy and security issue.

Figure 3.0: Research Procedure

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 Next, the table 3.0 shows the research method for each of the objectives and

questions of the study. The research method is separated into three subtopics, which are

the research design, research collection methods and research analysis methods. All the

objectives and questions of this study are using descriptive, interview and exploratory

studies. For research collection methods to meet objectives requirements and research

questions, this research uses primary and secondary data. For research analysis

methods, researchers use interview methods, document analysis assisted by using

ATLAS.ti 8 software programme.

Table 3.0: The Relationship between Research Objectives, Research Question and

Research Analysis Methodology

Research Research Research Methodology

Objectives Questions
Research Design Research Research

Collection Analysis

Method Method

1. To identify How does the - Exploratory - Primary data - Interview

adopter’s adopter’s
- Descriptive - Secondary data - ATLAS.ti v8
perception on the perception of the
- Interview
performance of privacy and

the e-banking on security level of

scope of privacy e-banking in

and security Islamic banks in

provided by Kota Bharu?

Islamic Banking

54
in Kota Bharu.

2. To analyse if How does the - Exploratory - Primary data - Interview

adopters’
privacy and - Descriptive - Secondary data - Documentation
decision in
analysis
security e- - Interview
choosing e-
- ATLAS.ti v8
banking of banking level of

Islamic banks in Islamic banks in

Kota Bharu is Kota Bharu

affected by the influence

implication of e- adopter’s

banking privacy decision in

and security of adopting e-

the bank. banking?

3. To conclude What are the - Exploratory - Primary data - Interview

the possible
resolution of the - Descriptive - Secondary data - Documentation
action can be
analysis
complication of - Interview
taken to
- ATLAS.ti v8
overcome the e- privacy and

banking privacy security in e-

and security
banking Islamic
issue.
banks in Kota

55
 Bharu?

3.6 PROTOCOL OF INTERVIEW

To complete the study, researchers have provided interviews protocol, which are

interview questions that will be used when interviewing informants to collect data. The

questionnaire is divided into three parts according to the research objectives in order to

complete the study.

Part A: Adopter’s perception on the performance of the e-banking on scope of

privacy and security provided by Islamic Banking in Kota Bharu.

i. Do you understand what is e-banking?

ii. Do you know what means by privacy and security?

iii. Have you using e-banking?

iv. What do you know about issue that related to privacy and security in e-

banking?

v. How your perception towards the performance of the privacy and security

level of e-banking that provided by Islamic banks in Kota Bharu?

Part B: Analyze if adopters’ decision in choosing e-banking of Islamic banks in Kota

Bharu is affected by the implication of e-banking privacy and security of the bank.

i. Do you know any technologies that used for e-banking?

ii. In your opinion why make you choose to use the e-banking?

56
 iii. Based on your knowledge, do you understand why cybercrime can take

place in e-banking?

iv. How does the privacy and security e-banking level of Islamic banks in Kota

Bharu influence adopter’s decision in adopting e-banking?

Part C: Possible action can be taken to overcome the e-banking privacy and security

issue.

i. Do you have experience in cybercrime that related to e-banking?

If says yes:

What is your respond towards the issue?

If says no:

What is your preparation for yourself to handle this kind of issue in future?

ii. How would you describe ________(cybercrime that happened to you or your

surrounding). In responding this question you can focus on the customer, the

organizations, or other things those standouts to you the most when you

think about e-banking.

iii. What resolution of the complication of privacy and security in e-banking for

Islamic banks in Kota Bharu that you think can be taken?

3.7 CONCLUSION

In this chapter, in the firstly describe the introduction of the chapter. Secondly,

description for the research designs that is chosen which are qualitative research and use

the exploratory study, interview and descriptive study. Then, the data collection method
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that explain in details about the method of the data collection that is the primarily and

secondary data. The primarily data will be the interview that will be conduct afterward

that may consist online banking users. The secondary data will be the journals and other

materials.

Next, the data analysis method that is the details explain of the technique use

such as content analysis, interview and to analyze the data obtain from the primary data.

As the method the researchers will use the ATLAS.ti version as the tools. There also the

table describe about summarize between research objective, research question, research

design, data collection method and data analysis method and interview protocol that will

use as guidelines during the interview session afterwards. Lastly, the elements are used

to answering the research objective and research question.

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