Role of perceived risk in online banking and its impact on behavioral intention : trust as a moderator

Purpose: This paper aims to revisit the role of perceived risk in online banking, using an alternative view on trust as a moderator on the relationship between perceived risk and behavioral intention (BI). With this aim, the conceptual model was proposed to examine the impact of perceived risk on BI directly and indirectly via unified theory of acceptance and use of technology 2 along with its interactionist relationship with trust. Design/methodology/approach: Structural equation modeling technique is used to analyze data collected from 677 bank customers via personal contact using a self-administered questionnaire. Findings: The results indicate that perceived risk as a multi-dimensional construct has a direct and indirect impact on BI via performance expectancy, social influence, hedonic motivation and price value. Moreover, it was found that trust moderates the relationship between perceived risk and BI. Practical implications: This study suggests that banks should create a trust-building mechanism in the online banking environment and develop certain risk management strategies such as providing detailed and thorough information, money-back guarantee and reassurance services to enhance confidence among the customers to use such services. The banks should also devote valuable efforts in designing website interface with improved security features to facilitate usability and reliability of online banking services. Originality/value: The present study makes an important contribution to the existing literature on e-commerce, especially in the field of online banking, by proposing an interactionist model between perceived risk and trust. The proposed model has never been examined in the relevant literature and could be used to provide a solid theoretical foundation in the context of online banking adoption.