Perceived risk and e-banking services: An analysis from the perspective of the consumer
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Lawrence F. Cunningham is the Joseph and Martha Davis Term Professor of Marketing at the Business School at the University of Colorado at Denver and Health Science Center and Distinguished Research Professor and Fellow at EDHEC, one of the leading business schools in France. He has written for the Services Industrial Journal, Journal of Services Marketing, International Journal of Service Industry Management, International Marketing Review, Advances in Services Marketing and Management.
James Gerlach is Professor of Information Systems in The Business School at the University of Colorado at Denver and Health Sciences Center. His research interests include e-commerce and management of information systems technology. He holds an MS in computer science and a PhD in management, both from Purdue University. His work appears in such notable journals as Management Information Systems Quarterly, IEEE Computer, IEEE Software, Communications of the ACM, Decision Support Systems and The Accounting Review.
Michael D. Harper is Senior Instructor of Operations Management and Statistics in The Business School at the University of Colorado at Denver. The courses he teaches include operations management, statistics, and project management. He received a PhD in operations research and statistics from Rensselaer Polytechnic Institute in Troy, New York. He has worked as a staff member at Los Alamos Scientific Laboratory and as a consultant in the oil industry. He has been published in government research publications, Journal of Air Transportation, Journal of Financial Services Marketing and Geophysics.
Abstract This research investigates the premise that purchasing e-banking services is perceived to be riskier than purchasing traditional banking services. Unlike previous studies on perceived risk that typically focused on the relationship of perceived risk and information search, this exploratory study examines the dynamics of perceived risk throughout the various stages of the consumer buying process. A survey of 159 respondents reveals a risk premium for e-banking services that follows a systematic pattern throughout the consumer buying process. When viewed as a dynamic process, perceived risk for e-banking services shows more radical changes in risk levels than traditional banking services. The analyses indicate that financial risk drives the risk premium while psychological, physical and time risk play ancillary roles as risk drivers at certain stages of the consumer buying process. A major implication of this study is that there is a risk premium for e-banking services and the risk premium permeates all stages of the consumer buying process. Risk mitigation strategies are addressed. Keywords Lawrence F. Cunningham Graduate School of Business, University of Colorado at Denver, P.O. Box 173364, Denver Colorado 80217-3364, USA. Tel: +1 303 556 5822; e-mail: Lawrence.Cunningham@ cudenver.edu
E-banking services, consumer behaviour, perceived risk
INTRODUCTION E-commerce sales hit $17.6bn in the third quarter of 2004, a 6 per cent i
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