DR. CARLOS S.

LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

SAFETY AND SECURITY OF ONLINE BANKING: THE

PERCEPTION OF THE ONLINE BANKING USERS IN DR.
CARLOS S. LANTING COLLEGE

A Research Project
Presented to the Faculty of the
Basic Education Department / Senior High School
DR. CARLOS S. LANTING COLLEGE
Quezon City

by:

Apolonio, Jhanna Erica

Banzuelo, Airalene V.
Dordas, Alvin Christopher
Javeñar, Johannes Gwenn B.
Petros, Monique
Rodriguez, Shanaia Twain
Ruiz, Kristine Angelie C.

In Partial Fulfillment of the Requirements for the Program of

SENIOR HIGH SCHOOL

 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

Chapter 1
INTRODUCTION

Background of the Study

Online banking refers to banking services where depositors can manage

more aspects of their accounts over the Internet, rather than visiting a branch or

using the telephone. Online banking typically is comprised of a secure connection

to banking information through the depositor’s home computer or another device.

Banking is one of the largest financial institutions constantly explores the

opportunity of technology enables to provide a better customer experience and

convenience.

According to (Shen ,Gong & Bao ,2009) From the beginning of the new

century to the rapid development of global information technology today, with the

popularity of the Internet and the rapid construction of information technology,

more and more people involved in the use of the Internet. Especially in the past

two years, online surfing, e-commerce, online chat, e-government, Internet

banking, online shopping transactions, online games, this series of network

activities, has become a hot application of today's society. With the increasing

reliance on the network and information technology in all aspects of society, the

network has become an indispensable part of work and life for most people. The

rapid development of the network brings closer the distance between real life and

virtual world, changed the way people work, study and live. It can be sure that now
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

the human life becomes more relaxed because of network. However, the network

has brought us great convenience, but also brought some difficulties. Due to the

design defects of the Internet itself and its complexity, openness and expanding of

the software scale, the application is more and more complex, making the hidden

danger of the network increased dramatically. Therefore, the security of the

network has become one of the important factors hindering the process of

information technology. Today, for many users, they know that they are facing a

certain network threat. But from where, what will happen, are not very clear for

many people. Generally speaking, ordinary network users mainly face Internet

security issues. Computer viruses, cyber scams, data loss, botnets, phishing,

privacy leaks, are a few example of network security threats. The recent impact of

large events, such as: Panda burning incense virus, Trojan industry chain

exposure, once macro virus, Trojan horse site-linked malware, makes the network

security issues become the focus of attention, even to worldwide [Link]

the beginning of the new century to the rapid development of global information

technology today, with the popularity of the Internet and the rapid construction of

information technology, more and more people involved in the use of the Internet.

Especially in the past two years, online surfing, e-commerce, online chat, e-

government, Internet banking, online shopping transactions, online games, this

series of network activities, has become a hot application of today's society. With

the increasing reliance on the network and information technology in all aspects of
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

society, the network has become an indispensable part of work and life for most

people. The rapid development of the network brings closer the distance between

real life and virtual world, changed the way people work, study and live. It can be

sure that now the human life becomes more relaxed because of network. However,

the network has brought us great convenience, but also brought some difficulties.

Due to the design defects of the Internet itself and its complexity, openness and

expanding of the software scale, the application is more and more complex,

making the hidden danger of the network increased dramatically. Therefore, the

security of the network has become one of the important factors hindering the

process of information technology. Today, for many users, they know that they are

facing a certain network threat. But from where, what will happen, are not very

clear for many people. Generally speaking, ordinary network users mainly face

Internet security issues. Computer viruses, cyber scams, data loss, botnets,

phishing, privacy leaks, are a few example of network security threats. The recent

impact of large events, such as: Panda burning incense virus, Trojan industry

chain exposure, once macro virus, Trojan horse site-linked malware, makes the

network security issues become the focus of attention, even to worldwide

audience.

In the philippines, according to Mastercard’s Online Shopping Behavior study

2012, internet usage had been increasing rapidly and more Filipinos had been
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

shopping online. However no research paper has yet been made to assess the risks

on online transactions in the Philippines despite its popularity. Likewise, there are

no academic endeavors to understand the risk faced by individuals who transact

online business. This prompts the need to conduct a study to assess the risks

associated on online transactions and characterize online transaction users

specifically from Davao City.

Statement of the Problem

The main purpose of this research is to determine the safety and security

level of online banking as perceived by the employees in Dr. Carlos S. Lanting

College (DCLC) during the school year 2018-2019.

Specifically, it aims to answer the following questions:

1. What is the demographic profile of the respondents in terms of the following:

1.1 age;

1.2 gender;

1.3 civil status;

1.4 educational attainment; and

1.5 position?

2. What is the safety and security level of online banking services as perceived by

of the employees of Dr. Carlos S. Lanting College (DCLC) in terms of:

 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

2.1 view transactions;

2.2 pay bills;

2.3 send money;

2.4 fund transferring; and

2.5 Foreign exchange transactions?

3. Is there a significant difference on the perception on the safety and security level

of online banking services when respondents are grouped according to their

profile?

4. Is there a significant relationship on the perception on the safety and security

level of online banking services when respondents are grouped according to their

profile?

5. What are the problems encountered by the employees in online banking?

6. What recommendations can be drawn from this study to improve the online

banking?

Scope and Delimitations

This study aims to determine the safety and security level of online banking.

The respondents of this study will be the online banking users in Dr. Carlos S.

Lanting College (DCLC), they will be randomly selected to answer the interviews

and questions.
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

However, the researchers only have limited time in conducting this

study and due to continuous and sudden change of the online banking practices,

what is relevant today might be irrelevant tomorrow. The only respondents that will

be used in this study are the teachers from the Basic Education Department and the

selected banks that will be involve In this is study is Banco de Oro (BDO), Bank of

the Philippines Islands (BPI) and Security Bank. In determining the safety and

security level the survey questionnaire will be used in which the survey

questionnaire will undergo the pilot testing and cronbach’s alpha to measure the

reliability of the constructs and in determining the challenges potency in-depth

interview will conducted among the respondents. The whole duration of this

academic undertaking will cover the second semester of the school year 2018-2019.

Significance of the Study

Online Bankers – this study will provide information about the safety and security of
online banking it will serve as a guide for them to be aware about the online banking
practices.

Future Researchers -
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

Chapter 2
REVIEW OF RELATED LITERATURE AND STUDIES
Local Studies
Local Literature
Foreign Studies
According to Sumra (2011) the proliferation and penetration of internet has

opened new horizons and scenarios for the retail banking industry. The retail banks

are now providing their products and services through the electronic medium; e-

banking. E-banking is considered to have a substantial impact on banks’

performance. The aim of this paper is to examine the impact of e-banking on the

profitability of Pakistani banks, in particular. This paper covers twelve banks across

Pakistan. The study is qualitative in nature which examines different objectives which

determine the performance of banks mainly in terms of profitability. It also discusses

the effect of customers’ literacy on provision of services from banks’ perspective. It

also discusses the basic motive of banks to adopt e-banking services. The study is

done through taking interviews from the managers of these banks. The results show

that e-banking has increased the profitability of banks; it has enabled the banks to

meet their costs and earn profits even in the short span of time. The illiteracy of

customers is not regarded as a major impediment in provision of their products and

services. For banks, the main motive to adopt e-banking is to increase their clientage
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

and to retain their customers. The profitability of banks has augmented in

transitioning to e-banking medium.

According to Kamakodi (2008) financial sector is the spinal cord of sovereign

economy of any country. India is no exception. The technology adaptation in banking

operations in India was a few decades behind that of in developing countries. Since

early 1980s, Reserve Bank of India (RBI, Regulator) has been pushing the Indian

banks towards computerisation as a mechanisation of operations. Technology was

seen as a key business enabler in six vital areas of banking viz. augmenting profit

pool, operational efficiency, customer management, distribution and reach, product

innovation and efficient payment and settlement (Shastri, 2004). RBI expected that

these developments in the areas of housekeeping and decision-making will improve

the customer service levels and productivity, ultimately resulting in better profitability.

In recognition of the need to introduce greater competition with a view to achieving

higher productivity and efficiency of the banking system, RBI issued guidelines in

January 1993 for the entry of “New Private Sector Banks” (NSPB). Subsequently,

nine new commercial were granted license to start banking operations. Liberalisation

coincided with the Information Technology Revolution of the 1990s. New Private

Sector Banks started with 100% computerisation right from the day 1 of operation

and revolutionised the banking service levels in India by matching even banks in

developed countries. New Private Sector Banks (NPSBs) used technology as a

 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

strategic tool for customer acquisition. This made all government-owned Public

Sector Banks (PSBs) and the existing Old Private Sector Banks (OPBs) to go on

defensive to invest in IT to retain their customer base as NPBs gained what PSBs

and OPBs lost.

According to Gupta (2008) Internet banking has attracted the attention of

banks, securities trading firms, brokerage houses, insurance companies, regulators

and lawmakers in developing nations since the late 1990s. With the rapid and

significant growth in electronic commerce, it is obvious that electronic (Internet)

banking and payments are likely to advance. Researches show that impact of

Internet banking on cost savings, revenue growth and increased customer

satisfaction on Industry is tremendous and can be a potential tool for building a

sound strategy. However, it has raised many public policy issues before the banking

regulators and government agencies. Interestingly, reliable and systematic

information on the scope of Internet banking in Indian context is still not sufficient,

particularly what it means to the consumers and the bankers. The paper fills

significant gaps in knowledge about the consumer’s perspective of Internet banking,

trace its present growth and project the likely scenario. The paper presents the data,

drawn from a survey of Internet banking consumers and the services providers

(banks) that offer Internet banking and develops a functional model for maximizing

value to the consumers, which the banks may choose to adopt Internet banking
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

strategically. The paper identifies the weaknesses of conventional banking and

explores the consumer awareness, use patterns, satisfaction and preferences for

Internet banking vis-à-vis conventional form of banking and also highlights the

factors that may affect the bank’s strategy to adopt Internet banking. It also

addresses the regulatory and supervisory concerns of Internet banking.

According to Omar (2011) The Promotion of online banking technology

enabled the banks to enhance its operations with cost cutting effectively and

efficiently in order to handle daily banking affairs via online banking channel.

Customers are being facilitated by reducing their visits in banks and they can carry

out their transactions via internet or ATM Machines instead of personally visiting the

branches. The researches so far done reveal that mostly the customer of banks are

unaware about online banking services and there is a lack of trust among customers

on online banking services. Especially Pakistan is far behind the developing

countries as a lot of services regarding online banking are not available in Pakistan.

This study examines the customer perception, preferences, problems and

suggestions about online banking in Pakistan. The study reveals that mostly

customers prefer internet banking (IB) services over branch banking due to reliability,

convenience, speed, safety and security, cost effectiveness, user-friendly, and error

free system. In contrast the parallel finding shows that security problems, lack of

trust and knowledge, ATM machine problems etc. affect the adoption decision of
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SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

customers of internet banking services. The services which are not in Pakistan e.g.

Cash depositing facility through ATM machines, “SMS/E-mail Alert” Service, Transfer

funds through ATM machines, Payment of utility bills through internet are found most

required / demanding services by the customers in this study. This study will helps

the banks that how they can improve the level of online banking services in Pakistan

and what are the potential issues or services that should be introduced in society to

facilitate the customer in a better way and to compete their rivals in banking industry

as a whole.

Foreign Literature
According to Khandelwal S. (2013) In his research titled on “E Banking:

Factors of Adoption in India” This paper presents the last decade has witnessed a

drastic change in the economic and banking environment all over the world. With

the economic and financial sector reforms introduced in the country since early

1990s, the operating environment for banks in India has also undergone a rapid

change. Increasingly, more and more people are switching to electronic platforms

for executing financial transactions. Internet banking has brought about a 360-

degree change in the entire banking industry. The wider usage of cell phone and

internet certainly seems to be playing a role in blurring physical boundaries and

unlocking a whole new world of opportunities for banks in tapping newer customer

segments and in recording greater volume of transactions. For the banks,

technology has emerged as a strategic resource for achieve in higher efficiency,

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SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

control of operations, productivity and profitability. For customers, it is the

realization of their anywhere, anytime, anyway banking dream. This has prompted

the banks to embrace technology to meet the increasing customer expectation and

face the tough competition. This research paper is focused on what are the drivers

that drive consumers towards adoption of E banking. How consumers have

accepted internet banking and how to improve the usage rate were the focus of

research area in this study.

According to Kumbhar V. (2011) In his research paper “Factors Affecting

the Customer Satisfaction In E-Banking: Some evidences Form Indian Banks”. This

study evaluates major factors (i.e. service quality, brand perception and perceived

value) affecting on customers’ satisfaction in e-banking service settings. This study

also evaluates influence of service quality on brand perception, perceived value

and satisfaction in e-banking. Required data was collected through customers’

survey. For conducting customers’ survey liker scale-based questionnaire was

developed after review of literature and discussions with bank managers as well as

experts in customer service and marketing. Collected data was analyzed using

principle component (PCA) using SPSS 19.0. A result indicates that, Perceived

Value, Brand Perception, Cost Effectiveness, Easy to Use, Convenience, Problem

Handling, Security/Assurance and Responsiveness are important factors in

customers satisfaction in e-banking it explains 48.30 per cent of variance. Contact

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SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

Facilities, System Availability, Fulfillment, Efficiency and Compensation are

comparatively less important because these dimensions explain 21.70 percent of

variance in customers’ satisfaction. Security/Assurance, Responsiveness, Easy to

Use, Cost Effectiveness and Compensation are predictors of brand perception in e-

banking and Fulfillment, Efficiency, Security/Assurance, Responsiveness,

Convenience, Cost Effectiveness, Problem Handling and Compensation are

predictors of perceived value in e-banking.

According to Pooja Malhotra & Balwinder SINGH (2009) In their research

paper “The Impact of Internet Banking on Bank Performance and Risk: The Indian

Experience”. The paper describes the current state of Internet banking in India and

discusses its implications for the Indian banking industry. Particularly, it seeks to

examine the impact of Internet banking on banks’ performance and risk. Using

information drawn from the survey of 85 scheduled commercial bank’s websites,

during the period of June 2007, the results show that nearly 57 percent of the

Indian commercial banks are providing transactional Internet banking services. The

univariate analysis indicates that Internet banks are larger banks and have

efficiency ratios and profitability as compared to non-Internet banks. Internet banks

rely more heavily on core deposits for funding than non-Internet banks do.

However, the multiple regression results reveal that the profitability and offering of

Internet banking does not have any significant association, on the other hand,
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SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

Internet banking has a significant and negative association with risk profile of the

banks.

According to Shannak R. (2013) In their research paper titled “KEY

ISSUES IN E-BANKING STRENGTHS AND WEAKNESSES: THE CASE OF TWO

JORDANIAN BANKS “tried to scrutinize uses mixed method. Research about e-

banking has been conducted from different angles on different topics by a number

of researchers. The paper aims to scrutinize the current status of Jordan’s e-

banking industry, make out its strengths and weaknesses, and use the findings in

formulating future recommendations to make a donation to knowledge in the

chosen area. The choice of the topic was informed by previous studies and

experiences of the researcher and his former students from different countries but

currently focuses on the e-banking industry in Jordan. The methodology used to

achieve the research objectives included carrying out interviews with two local

banking executives, a direct opinion poll for banking customers, and the review of

the extant literature. The research commenced by formulating four hypothesis that

address the positive impact of e-banking for both the banks and their patrons.

However, an inadequate size sample was selected due to research boundaries.

The point of reference of the paper turned out to be explanatory and in the

direction of being a case study within the Jordanian context. This exploratory

research therefore, focused on three main magnitude of e-banking in Jordan

 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

namely; Infrastructure readiness, behavioral influences, and the regulatory

coverage. The findings indicated that while the infrastructure is advanced in

comparison to some of the other regional examples, it was still below the Western

standards. It also has been established that the Jordanian e-banking is still not

trusted enough by the individual clients. Finally, the legal or regulatory coverage in

Jordan was found to be not fully satisfactory yet, although not very unusual from

what exists in some of the most sophisticated country examples that it was

benchmarked with. Some important recommendations to enhance the e-banking

industry are presented, such as; focusing more on the mobile- functionalities and

services for being more advanced than internet services in Jordan, enhancing the

broader e-commerce regulations that are weakening the more advanced local e-

banking regulations, and launching local awareness and familiarization campaigns

which could be undertaken by Jordanian banks.

According to Ankit Kesharwani & Gajulapally Radhakrishna (2013) In their

research paper “Drivers and Inhibitors of Internet Banking Adoption in India”. This

paper research on different banks is on condition that e-banking services, as this

would revolutionize their profits. Since internet banking in India is still in its nascent

stage, it is essential for e-banking institutions to enhance reception and usage of

internet as a banking channel by their customers. This paper has reviewed the

most of seminal studies in the area of diffusion of innovation and makes an attempt
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SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

to do an experimental research that looked into the factors that drives and inhibits

internet banking usage in India. An investigative factor analysis followed by a

positive factor analysis has been applied on 362 internet banking users. Findings

resulted in seven factors – perceived benefit, hacking and fraud risk, performance

risk, computer self- efficacy, technology intricacy, social influence, and pricing

concerns. The results suggest that acceptance and usage of internet banking

services can turn into a fundamental concern for future research, as the drivers

overcoming the inhibitors over time at an influencing rate. Moreover, this study also

compares the findings with extant diffusion of innovation literature and identified

several additional factors that can affect internet banking adoption in India

Synthesis
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

Conceptual Framework

INDEPENDENT DEPENDENT RECOMMENDATION

Demographic The perception of In order to create

online banking
profile of the and rebuilt the trust
users in terms of
respondents of the customers,
the safety and
 Age security levels of banks should take
online banking.
 Gender further strong

 Civil Status security measures

 Educational to every aspects of

attainment the online banking

 Position services and also

develop the

services which can

satisfy customer’s

needs.
 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

Research Hypothesis

Definition of Terms

Foreign Exchange – process of settling accounts or debts between persons

residing in different countries

Automated Teller Machine (ATM) - a computerized electronic machine that

performs basic banking functions (such as handling check deposits or issuing

cash withdrawals).

Banking - the business of a bank or a banker.

Emerged - to come into being through evolution

 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

Chapter 3
METHODOLOGY
Research Design

The Sample

Data Gathering Instrument

The researchers will conduct an interview to know their perspective about

online banking and it will be the basis to gather some information in formulating

the survey questionnaire. The survey questionnaire will be the primary tool for data

gathering that will determine the safety and security levels of online banking.

Data Gathering Procedures

In order to examine the safety and security level of online banking as

perceived by the online banking users in Dr. Carlos S. Lanting College (DCLC) the

instrument that will be used in conducting the data is interview and survey

questionnaires. Through this technique, the researchers will be capable to answer

the following problems.

1. Prepare questions that will be used in conducting an interview.

2. Seek permission to the respondents to conduct a interview, an inform consent will

be provided to the respondents.

 DR. CARLOS S. LANTING COLLEGE
SAFETY AND SECURITY OF ONLINE BANKING: THE PERCEPTION OF THE ONLINE BANKING
USERS IN DR, CARLOS S. LANTING COLLEGE

3. Conduct interview that will be answered by the respondents and it will be the

guide in formulating questions on the survey questionnaires.

4. Finalize the questions that will help in answering the questions that are

related to the main topic.

5. Seek permission to the respondents to conduct a survey, an inform consent will be

provided to the respondents.

6. Provide survey questionnaire and Select specific respondents that will be

needed to answer the questions.

Data Analysis

Statistical Treatment of Data