fear of cybercrime

FEAR OF CYBERCRIME Lessons for the Global e-Banking Sector

FEAR OF CYBERCRIME Lessons for the Global e-Banking Sector

Lloyd Waller • Orin Bailey Stephen Johnson

First published in Jamaica, 2015 by Ian Randle Publishers 11 Cunningham Avenue Box 686 Kingston 6 www.ianrandlepublishers.com © Lloyd Waller, Orin Bailey, Stephen Johnson 2015 NATIONAL LIBRARY OF JAMAICA CATALOGUINGIN-PUBLICATION DATA

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, photocopying, recording or otherwise, without the prior permission of the publisher and author. Cover and Book Design by Ian Randle Publishers Printed and bound in the United States

Table of Contents List of Figures

¦ vi

List of Tables

¦ vii

Acknowledgements

¦ ix

Introduction

¦ xi

1. Understanding Electronic Banking

¦ 1

2. Fear of Crime

¦ 21

3. Cybercrime

¦ 46

4. Fear of Cybercrime as a Challenge to Global Electronic Banking ¦ 64 5. The Media, Risk Perception and Fear of Cybercrime ¦ 77 6. Conclusions

¦ 85

Bibliography

¦ 93

List of Figures Figure 4.1: Use of Electronic Banking

¦ 64

Figure 4.2: Purpose of using Electronic Banking ¦ 65 Figure 4.3: Reasons for not using Electronic Banking ¦ 66 Figure 4.4: Risk Perception of Online Banking ¦ 73 Figure 4.5: Risk Perception of Online Banking: Online vs. Offline Users in Jamaica ¦ 73 Figure 4.6: Risk Perception of Online Banking: Online vs. Offline Users in Barbados ¦ 73

List of Tables Table 2.1: C-A-M combinations and Attributed State ¦ 28 Table 4.1: Fear and the Use of Credit Cards Offline and Online ¦ 69 Table 4.2: Factors Influencing Fear of Cybercrime Victimization ¦ 71 Table 4.3: How the Media Influences Risk Perception ¦ 76

Acknowledgements This study would not have been possible without the kind financial support of FirstCaribbean Bank. The study was also made possible with the kind administrative and technical support of the Faculty of Social Sciences of the University of the West Indies, Mona; particularly, Professor Mark Figueroa, who was at that time the Dean of the Faculty of Social Sciences, as well as Ms Kayann Henry, the Administrator for the project, which funded this study. We would also like to thank the surveyors in Jamaica and Barbados, who worked assiduously to collect the data that was analyzed to produce this book. We would also like to thank Professor Anthony Harriott who provided us with direction and insight related to the ‘Fear of Crime’ literature.

Introduction Within the contemporary global environment, banks around the world have been moving with the forces of globalization in an effort to capitalize on the merits of liberalization, the Internet, and computer technology as well as the emergence and expansion of e-commerce (Ramayah, Jantan, Noor, and Ling 2003; Sulaiman, Lim, and Wee 2005). The fusion of retail banking and information technology, is commonly referred to as electronic banking (e-banking) or Internet banking (henceforth e-banking). For the purpose of this book, e-banking is defined as ‘the automated delivery of new and traditional banking products and services directly to customers through electronic, interactive communication channels’ (Sathye 1999). E-banking systems allow customers and financial institutions to obtain banking information, and do business transactions electronically using advanced information and communication technologies such as a personal computer or with the use of a hand-held device. In the last decade, e-banking has helped to advance the symbiotic relationship between banks and their customers, as they are both beneficiaries of mutual gains. E-banking has indeed changed the mode of operation for both banks and customers. Previously, the banking landscape was characterized by traditional, face to face banking. Customers had no alternative but to visit physical structures plagued by long lines with little or no flexibility, as banking transactions had to be conducted during business hours (Kuo 2010; Laforet and Li 2005; Sathye 1999; Sulaiman et al. 2005). Today, through e-banking, banking is done anytime, all the time, and in real time.

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There is no denying it; e-banking has had significant effects on the banking landscape. In particular, banks around the world have experienced an increase in their profit margins for retail banking due to the lower cost of Internet banking compared to traditional banking. Their capacity to handle transactions has also increased as automation has made once tedious and meticulous transactions such as bank wires, routine and seamless. Customers too have benefited from this revolution, as transaction processing speed has increased in addition to a significant reduction in transaction costs (Sulaiman et al. 2005; Wu, Lin, Li, and Lin 2010). Most significantly, the fusion of banking and the Internet has led to what is known as the virtualization movement (Karjaluoto, Mattila, and Pento, 2002; Man 2006). Virtualization refers to the removal of the constraint of time and geographical location. Consequently, customers have access to a number of products and services 24 hours a day and 7 days a week at their own convenience (Karjaluoto et al. 2002; Sulaiman et al. 2005). Forecasts of Internet banking have always been positive. The increasing competition in the market, lower transaction costs, and quicker turnover rates have been blessings to both the customer and the bankers, who have been bold enough to adopt and adapt to this new environment. Despite these benefits however, there are many challenges to e-banking, which over the years have also served to threaten the global banking industry (Karjaluoto et al. 2002). Based on the literature these ‘challenges’ often cited include; technological challenges such as interoperability, hardware and software deficiencies, and non-technological (human) challenges such as issues of consumer trust and confidence, access to information communication technologies (ICTs), limited knowledge about using ICTs, and resistance to change by customers (Kuo 2010; Laforet and Li 2005;

Introduction ¦ xiii

Sudhahar and Karthikeyan 2010; Wada and Odulaja 2012; Wu et al. 2010). Adjacent to these technological and nontechnological factors are social ones as well. These range from resistance to change, the digital divide, as well as the lack of technological capacity among citizens (Laforet and Li 2005; Wada and Odulaja 2012). One non-technological challenge, which has not been explored in the literature, is ‘fear of cybercrime’. Our attraction to, and interest in this ‘fear’ factor emerged out of a commercial desk-study we undertook in 2010, which sought to ascertain the major factors that undermine electronic banking around the world. During our presentation to the client, a discussion ensued about the possibility of fear. We admitted that fear of cybercrime was not one of the factors that we discovered in the literature. However we could relate to the discussion and were able to draw parallels using our knowledge of the ‘fear of crime’ literature (Alshalan 2008; San-Juan, Vozmediano and Vergara 2012). The acknowledgement of this research gap led us subsequently to undertake some theoretical sampling with a view to identifying deviant samples among the literature on challenges to electronic banking. What we discovered was that although cybercrime has become a source of concern, fear has not been comprehensively explored in the electronic banking literature. Although there were a few studies on fear of cybercrime such as Alshalan (2008) as well as (SanJuan, Vozmediano and Vergara 2012), this was not enough to popularize the fear of cybercrime as a major factor which threatens electronic banking. This was understandable, given that electronic banking is a relatively new area of research; and researchers as well as practitioners are still exploring the many issues as they emerge. This is a gap in the electronic banking literature which needed to be filled.

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GOALS AND OBJECTIVES OF THIS BOOK This book is based on a study that sought to bridge an important gap in the analysis of the academic, policy, and practitioner literature on factors that deter users from engaging in electronic banking. The overall goal of this study ascertains to what extent ‘fear of cybercrime’ threatens e-banking and to introduce and sensitize academics, practitioners and policymakers to the importance of including fear of cybercrime as a variable in the challenges to e-banking literature. Therefore, the primary research question that is explored in this study is: Does fear of cybercrime inhibit consumers from doing electronic banking in the English-speaking Caribbean? To answer this research question, a cross-sectional analysis of the views of respondents across two countries in the Caribbean was undertaken. Between November 2012 and November 2013, a data collection team consisting of students from the University of the West Indies Mona Campus ( Jamaica) as well as the Cave Hill Campus (Barbados) conducted a series of face to face interviews with consumers in Jamaica and Barbados. In both countries, respondents were selected using the quota sampling technique. The study targeted persons 18 years and older. The majority of the respondents were selected from urban and commercial districts as well as from two rural areas in each country. The sample size of the Jamaican study consisted of 800 respondents, while 500 respondents were surveyed in Barbados. Both samples were selected using the principle of population proportionate to size and were statistically representative of the population under investigation.

Introduction ¦ xv

WHO SHOULD READ THIS BOOK? This exploration of the fear of cybercrime and its implications for electronic banking is indeed multidisciplinary, interdisciplinary, and trans-disciplinary. Pedagogically then, this book will interest scholars and students, particularly those doing research on cybercrime, fear of crime, crime and technology, electronic or online banking, as well as information systems, and digital security management. Fear of crime scholars particularly, will find this book of interest given the attempt to extend the ‘fear of crime’ concept in the development of a conceptual framework to explore fear of cybercrime in the online banking sphere. This book provides a historical, conceptual, and contextual account of these different moments of social life, and the technical evolution of activities associated with these moments in and of themselves. In addition to this, the book shows the connection between e-banking and cybercrime both in the industrialized and the developing world. More importantly, this seminal and critical text will contribute to our understanding of how fear of cybercrime can affect the online banking industry. Persons operating in the corporate world, particularly the banking industry, will also find this book very useful, mainly because cybercrime has become a critical issue of concern in the contemporary global environment. Cybercrime poses a threat to the banking industry, corporations, citizens, as well as governments around the world today. Banking practitioners will be able to gain insights into this critical and overlooked issue and be able to design and formulate better strategies to attract more clients to their online environment.

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ORGANIZATION OF THIS BOOK The introduction to the book outlines the motivations for writing, the objectives of the book, the primary research question that we sought to answer as well as the research design (the approach, sampling strategy, and methodology used to collect the data for this study). Chapter one introduces the concept of ‘electronic banking’ in the developed and the developing world. It outlines the history of e-banking, the advantages and disadvantages. The global financial crisis and its implications for e-banking are discussed and an exploration of the various e-banking models, together with their strengths and weaknesses is presented. In this chapter the factors which deter consumers from conducting e-banking are also discussed. These include culture, the digital divide, knowledge of e-banking, the cost of e-banking, as well as issues of security and privacy. Finally, attention is drawn to the importance of including fear of cybercrime as one of the factors which hinders consumers from doing e-banking transactions. This study is located within the conceptual framework of fear of crime. Thus, chapter two provides a landscape assessment of the fear of crime literature. This chapter explores the different themes and perspectives surrounding the fear of crime discourse. It presents various empirical works as well as several theoretical underpinnings of fear of crime. In this chapter, fear of crime is defined and the components of fear explored. The determinants of fear, which include among other things, physical environments, social vulnerability, risk perception, knowledge of crime, and gender are also discussed. The implications of fear of crime are further explored. Chapter three introduces the concept of ‘cybercrime’; beginning with a brief conceptual and operational discussion on cybercrime and then an

Introduction ¦ xvii

account of the recent history of cybercrime. The connection between cybercrime and electronic banking is then discussed and the limited literature which connects these two concepts is presented. Issues of trust, confidence, and risk perception are explored, while at the same time, extending the discourse on fear of crime to the challenge of cybercrime in order to introduce the concept of fear of cybercrime. Chapter four presents the findings for this study. The use and purpose of online banking is frist presented and thereafter, the reasons why persons do not engage in online banking. Fear of cybercrime stands out as one of the main reasons. The parameters of this fear of cybercrime in Jamaica and Barbados are investigated and ‘risk perception’ identified as the primary factor fuelling fear of cybercrime. This can be a major deterrent to electronic banking. Finally, the role of the media in encouraging risk perception and contributing to the fear of cybercrime victimization while conducting electronic banking transactions is discussed. Chapter five explores how and in what ways the media portrays the possibility of Internet crime. Specifically, attention is drawn to several Hollywood movies, television sitcoms, and news reports that sensationalize, exaggerate and in some instances mystify cybercriminals and cybercriminal activities such as hacking. The disparity between cybercrime statistics and actual crime in media reports has created a moral panic within many societies, resulting in a general lack of trust and confidence in banks and online banking. The final chapter, summarizes the findings of this study. The implications of this fear of cybercrime for online banking is discussed and strategies to lower risk perception amongst consumers offered. Some of these options include better representation of cybercrime by the media and more social awareness by the banking sector.

Understanding Electronic Banking THE HISTORY OF E-BANKING Electronic banking saw its genesis during the 1960s and 1970s when the telecommunications industry in the United Kingdom began experimenting with ways to send closed captioning information across television streams using the teletext system. This one way flow of text information spawned interest in the technology as it could be applied to other services. Similar technology was developed by the General Post Office at around the same time with the ability to send information both ways using a telephone connection and a television. This new service was packaged and marketed as Prestel, a revolutionary way to communicate visually through videotex. By the early 1980s, several banks in the United States began offering home banking services through this videotex system. This activity slowly evolved and became known as ‘electronic banking’. Electronic banking was introduced to the United States in the 1980s (Cronin 1997), when several major banks, including Bank One, Citibank, Chase Manhattan, Chemical and Manufacturers Hanover, began offering home banking services to their clients. By 1983, Chemical Bank introduced Pronto, hailed to be the ‘first full-fledged electronic banking service’ utilizing a home computer, the required software, and a modem; users could perform functions such as tracking budgets and balancing chequebooks. This was then licensed to banks around the country and in 1985, it was modified to suit the needs of small businesses in the form of

2 ¦ FEAR OF CYBERCRIME

Pronto Business Banker. Spectrum is another home banking service that was developed in 1985 by Chase Manhattan and performed regular banking functions as well as allowed users to sell and buy stocks through a Chase broker. In 1983, the Bank of Scotland collaborated with the Nottingham Building Society to provide Homelink, the first electronic banking service in the UK. Shortly after, Barclay’s began offering a similar service to its clients. This first wave of e-banking created the foundation from which a viable and cost effective version of electronic banking would emerge. At the time however, the cost was prohibitive and required large amounts of capital to implement that was never recouped. The high degree of customization that was necessary to install the hardware as well as the cost of acquiring and maintaining the software was out of the reach of most customers. While the banks tried their best to create a usable service, home banking struggled to take off because a large part of the success was dependent on factors outside their control. Allen (1984), observed that ‘truly user-friendly software must be developed, home computer penetration must increase significantly, and adequate transmission links (phone lines or cable) must be in place’ (1). When the services were finally offered on a commercial basis, many of them suffered from low subscription levels and failed to become financially viable. However, the vision never died and continued to preoccupy the imagination of bankers for decades to come. In 1986, Nadine Wandzilak reported in the Network World on what she proclaimed to be the ‘second wave’ of videotex in the form of Covidea, a collaboration between AT&T and the Bank of America to provide a commercially viable way to bank from home, as previous initiatives were too expensive with terminals costing up to US$600. The new

Understanding Electronic Banking ¦ 3

technology was estimated to cost only US$100 to set up and would use a computer to provide, among other things, ‘leisure information, news, and sports’. The service centred on banking with the Pronto Business Banker being supplied to small businesses while expanding the home banking section of its market. As with the standard billing practices, users were charged US$4 to US$8 per month and then a per-minute billing fee of either US$0.15 off peak or US$0.40 during peak time when using the system. As the technology got cheaper, the entire industry became more interested and more large banks began to experiment with electronic banking. Continuously rebranding and launching itself, the banking industry continued to launch different varieties of the same service, trying repeatedly to gain penetration into the niche market. By the early 1990s, electronic banking services were primarily provided through third party developer software that connected the user to the bank’s server. The most popular of these were Quicken, Microsoft Money Manager, and Manage Your Money. While these offered useful services to the customers and the bank alike, they were unreliable, the technology and the software were expensive, there was limited tech support, the security was unproven, and the services were badly designed (Wallace 1998). Bad connections, incompatibility, and the need to constantly upgrade software would lead to the bemusement of users who were expecting an easier, quicker, and more convenient way of banking. While their steadfast efforts continued to produce a level of confidence and skill necessary to carry the vision forward, elsewhere, another set of visionaries were busy producing the tool that would propel electronic banking to the level of dependable service we now expect today.


By 1993, the tools necessary for the functioning of the World Wide Web were fine-tuned and ready to be rolled out. That same year, Mosaic, the first graphical browser was developed and shortly thereafter in April 1994, a trial version of the first web-based online financial service system was created by Stanford Credit Union. This trial version allowed students to conduct banking activities without the need to install or upgrade any software (apart from a web browser) or store information on their computers to use the service. The bank had all the information, and transactions would occur on a secure server operated by the bank. In quick time, other banks caught on to the new technology and the trend in Internet banking took off. Less than a year after, over 20 banks in the United States began offering full banking services online. By 1997, thousands of banks worldwide offered a number of services on the Internet. On October 6, 1995, Presidential Savings Bank began to allow its customers to access their accounts from home, and became the first financial provider to offer Internet use. The electronic banking service as it is known today began on October 6, 1995. The innovation soon spread, with wellknown banks such as Chase Manhattan and Wells Fargo both becoming early adopters. For the most part, e-banking was concentrated in developed countries such as the United States, Canada, and in Europe. Services offered included the checking of account balances, bill payment, funds transfers, and a variety of other services. Through elimination of the ‘middle men’ whose programs they once depended on, the banks acquired a level of flexibility in online servicing that they never had before. They were now able to directly service customer transactions as well as market additional services such as wealth management services and financial products like annuities, stocks, and other investment opportunities.


In addition, customers were never able to make transfers between banks using these third party systems – a major inconvenience that was now on the verge of being solved via the new web infrastructure. The general level of optimism that pervaded that atmosphere was palpable in the remarks and corporate plans of banks all over the world during this time, as was typical during the Dot-Com boom. By 1997 about nine per cent of banks offered electronic banking to its customers, but 79 per cent had plans to launch Internet banking services to its customers. In explaining their motivation to start the service, 89 per cent of bankers said company image was the reason to launch the product; 83 per cent listed competitiveness, and 80 per cent said it was a way to provide better service. Around this time, the media did register the industry’s disappointment with the initial pace of uptake of the services, but bankers remained hopeful that it would continue to accelerate in subscriptions through 1999, by which time, electronic banking was expected to be a worldwide and mainstream phenomenon (Wallace 1998). A senior analyst at Tower Group said that the disruption in web-based implementation caused by the massive bank mergers throughout the industry was a blessing in disguise, as it helped to normalize the entire system by forcing them to adopt a common web-based platform for online transactions to make system integration easier when consolidating the mergers (Wallace 1998). As a result of this need for conformity, a consortium of 16 different banks, IBM, and Visa USA created the Gold Standard – a backend infrastructure system that standardized all transactions within a portion of the banking sector accounting for more than half the entire customer base in the United States. This marked a key point in the now raging battle for market share


between the banks and third party software clients such as Inuit and Microsoft. Since the introduction of web-based banking, there has been a gradual shift in retail banking towards that platform with a reenergized focus of getting as many customers as possible to bank online. The globalization era has forced a new level of competitiveness upon these banks, and smaller banks are forced to compete with bigger banks, which span borders looking for savings in reducing branch locations and staff through increased use of electronic banking. By offering services on the Internet, this affords them the opportunity to merge or downsize the scale of their bricks and mortar operations (Chou and Chou 2000). The era was renowned for the constant demonization of bank branches as wasteful and pretentious anachronisms by business consultants. This accelerated the move towards electronic banking. In Thailand, for example, since the introduction of electronic banking, “nearly every bank has implemented early staff retirement programs as well as branch closures or downsizing in an effort to refocus on profitability. This is reflected in statistics, which show that there were 3,632 bank branches as of July 2002 compared to 3,837 at the end of the first quarter of 1999 ( Jaruwachirathanakul and Fink 2005). The movement to electronic banking continued in 2013, with even more analysts predicting huge savings from further bank closures (Molloy 2013). In 2012, the Danishowned bank Danske, closed more than half of their branches and laid off over 100 staff after also discontinuing the use of cash and cheques in their branches, effectively moving all of their 160,000 customers online. While it is clear that web-based banking is a solution to problems faced both by the customer and the banker, the initial claims and targets proved to be overambitious. As


early as 2000, the Economist blew a whistle on the lack of fulfillment of promises made by the online banks; noting the continuous buyouts, mergers, and restructuring of these online-only banks, giving rise to the prominence of so called ‘brick ’n’ click’ banks that operated at least one branch, but conducted most of their business online (the Economist 2000). The lack of success of these banks is partly attributable to the reluctance of customers to place confidence in the security and integrity of electronic banking. In addition to the still unreliable service synonymous with the Internet at the time, the level of security online was and continues to be a foremost concern. In fact, unproven and unfamiliar security infrastructure associated with the Internet has been of great concern to potential users since the inception of electronic banking (Allen 1984). While the increasing volumes of transactions being conducted is an indication of the growing trust in the capability of the banking system to perform tasks, the issue of hackers gaining access to accounts and personal information is still a concern with Internet-based banking transactions. Research commissioned by Deutsche Bank showed that online users were becoming more skeptical of the security of their online transactions and as a result were more willing to pay for electronic banking services. Minor teething issues have largely been overcome. The technology has become cheap enough, and society technologically literate to feasibly support the implementation of electronic banking. The ubiquity of information communication technology today has also made it feasible for companies to invest in providing services through virtual channels. The team at Forrester Research estimates that the number of smartphones in the world will reach one billion by 2016 (Schadler and McCarthy 2012). As early as 2001, eight banks in the US had over one million online users with


19 million households regularly going online, and by 2009 this number had increased to 54 million (OFI 2012). In 2011, the American Bankers Association reported the service as finally becoming mainstream because the majority of Americans, including the 55 and older age group preferred banking online than going into a branch (American Bankers Association 2011). Banks are currently preparing for the takeover of ‘Generation Y’, who are young, tech savvy, always on the go, and demand instant gratification (EFMA and Oracle Financial Services 2010).

ELECTRONIC BANKING IN THE DEVELOPING WORLD The nature of globalization meant the revolution in Internet banking in first world countries inevitably influenced a similar revolution in the developing world. In the latter part of the 1990s, developing countries began to follow suit, realizing the potential of the Internet to provide symbiotic benefits for both banks and customers. For instance, developing countries such as Kenya, India, and Thailand added Internet banking as an alternative banking option to their banking channels in the year 2000 (Sulaiman et al. 2005). In Malaysia, there has been a rapid adoption of the service in view of a huge demand in the expansion of online services offered by local and international banks there. In 2009, CIMB Bank Bhd had a registered user base of 1.7 million persons compared with 150,000 in 2005, while the Malayan Bank Bhd had 1.1 million registered users with 90,000 monthly users and 33 million transactions recorded per month. Moreover, studies have found that the spread of e-banking around the world resulted from intensive competition caused by deregulation and market liberalization of the late 1980s


and early 1990s that exposed banks to external competitions. For instance, the Interstate Banking Bill of 1994 in the United States allowed banks to serve customers across the United States and later globally. In order for banks to remain competitive and operational amidst the aforementioned factors, they had to resort to use of information technologies (Auta 2010; Chou and Chou 2000). Another explanation is that, it is intrinsic for banks to operate at an opportunity cost. Therefore, by offering services on the Internet affords them the opportunity to merge or downsize the scale of their bricks and mortar operations (Chou and Chou 2000).

THE IMPACT OF THE GLOBAL FINANCIAL CRISIS The 2008 global economic crisis seems to have created a further push for the adoption of electronic banking through greater initiative from the banks themselves. With evercontracting profit margins, electronic banking is seen as a way of driving efficiency and reducing costs. Customers have also increased their demand for tools that will give them more control of their financial lives as 71 per cent of consumers said they needed to pay more attention to their finances than they did a year ago, and 28 per cent reported an increase in the use of electronic banking (Rapport 2009). In Europe, statistics show that some 38.7 per cent of persons used Internet banking in December 2011, with ING being the most commonly visited website. The crisis also highlighted some new concerns for the banks regarding stability, as the possibility of a virtual run on the bank was now possible. For example, Northern Bank in the UK is an example of how Internet banking can increase the risk of a bank becoming insolvent due to


the reduced time given for a bank to respond to negative information. When the BBC revealed the real extent of the financial situation being experienced by the bank, the depositors responded quickly by logging on to the banks online service and transferring their money to other banks. This process would have been much slower in the past due to opening and closing hours and days. The run on the bank did not stop until the Exchequer made a guarantee on all accounts up to £35,000. Therefore it can be concluded that Internet banking is a major source of instability during times of crisis due to the immediacy of the response to negative information, and easy access to the accounts by customers. While it did not create a contagion effect in this case, it did hasten the demise of the bank. Regulations concerning banking transactions have evolved out of the need to demystify the legality and to ensure the sustainability of e-commerce and transactions. The need to create some amount of assurance that agreements were binding and backed by law was recognized by early adopters of Internet banking and through government action, legislation, and regulations provided further formality to the whole affair. In the US, this was fulfilled through a series of legislation at the federal level that included the Uniform Commercial Code, the Uniform Electronic Transaction Act, and the E-Sign Act. Further demystification was eventually reached through clarification of status and implementation of oversight bodies from the relevant banking authorities. The UK, EU, Australia, Japan, Hong Kong and Singapore all, around the same period, implemented regulations and laws that would govern Internet banking. Internationally however, there were questions as to the legal status of transactions made across borders as well as the taxability of these accounts and transactions that operated transnationally. A framework for the development of laws in this area was


therefore established under the United Nations Commission on International Trade Law. Looking ahead, the momentum towards electronic banking seems to be unstoppable. The emergence of new markets, the increasing virtualization of services, increase in global supply lines, and online shopping as well as the changing attitudes and cultures that demand round the clock and immediate gratification are all factors working towards bringing services on the Internet.

E-BANKING MODELS Electronic banking evolved over the decades following trends of technological development and the increasing techno-literacy of people. These changes were matched with modifications in the kind of services provided by these banks online. They therefore can be broken down into three main types of electronic banking: informational or basic; communicative or simple transactional and transactional or fully transactional (Office of the Comptroller of the Currency 1999; RBI 2001). Informational banking refers to a bank’s online presence mainly for marketing purposes of providing information on products and services that are offered. Communicative banking would allow the user to perform inquiries such as email correspondence and maybe view their balance along with other personal information and related activities. Instructions can also be given over this medium, but the user does not have a direct connection to their account. Transactional banking allows the user to perform different types of transactions. A shortlist of these include: opening an account; accessing account information; transferring funds; electronic cheque conversion; getting a bank statement;


paying bills; downloading account information; ordering cheques; cheque reconciliation; make change passwords; create alerts; request a debit or credit card; request or check the status of a loan; and purchasing bank products along with other activities. This is the most advanced form of banking online and is also the one with the highest risk due to the high level of access given to the computers on the network into the bank’s internal servers.

INFLUENCERS OF ELECTRONIC BANKING Benefits The increasing popularity of online banking is a clear sign that the perceived benefits outweigh any challenges or disadvantages that have become apparent since its inception. The basic advantages are easily perceived and were confirmed by a study cited by the American Bankers Association (2011) showing convenience of the service being the main reason cited for most customers to register for electronic banking. Second was the ability to avoid long lines, waiting, and the commute to the bank branches as well as the immediacy of transactions, which saves time and money. The third advantage was the control these tools gave persons over their financial life with budgeting applications, cash flow and expenditure statements, and the ability to easily create electronic documentation for a virtual history that regular users can fall back on. This is also a great help to users when calculating and filing taxes and dealing with other legal requirements. The borderless nature of electronic banking also means that persons who travel can perform transaction from anywhere with a computer and an Internet connection. Finally, all of these benefits come without the


need to choose between traditional or electronic banking because they are complementary and can easily coexist. The low transaction costs and elimination of overheads associated with the traditional network of branches model have allowed the banks to become leaner and more cost effective. This has also translated into benefits to the customer through higher interest rates on their deposits. While the interest rates have been dramatically reduced since then, Forbes Online reported that online banks still provide the highest interest rates on savings accounts with Ally Bank, American Express Bank and Sallie Mae Bank coming out on top with rates ranging from 0.85 per cent to 0.87 per cent (Barrington 2013).

Resistance to Change Generally, people are apprehensive towards change, and as such, the emergence of Internet banking as an alternative banking channel has not been spared. In this instance, human beings have demonstrated the customary reluctance to change from traditional banking to Internet banking. M. Sathye (1999) noted that people are not in a position to change from the familiar ways of doing things unless they identify a particular need to do so. This attitude towards emerging technology is often studied using the theory of reasoned action (TRA) and technology acceptance model (TAM). Both theories have provided useful insight into the reasons individuals may or may not gravitate towards a particular technology, predict attitudes as well as develop explanatory theories postulating individual’s attitude towards technology (Kuo 2010; Sudhahar and Karthikeyan 2010; Wu et al. 2010).The technology acceptance model is based on two theoretical constructs – Perceived Ease of Use (PEOU) and Perceived Usefulness (PU). In this case


perceived usefulness best describes customers who gravitate to electronic banking because of its supposed benefits. These customers view technology based on the relative advantages it offers. In the case of electronic banking, users adapt to this form of banking because of efficiency in service transactions, as opposed to going to the physical branch (Shi, Shambare, and Wang 2008; Wu et al. 2010).The most attractive factor is that of convenience but users are most intrigued by the time saving aspect. Seventy-nine per cent of e-bankers rate convenience as the most compelling factor that influences their decision to bank online; 82 per cent of 30–49 year olds and 73 per cent of 50–64 year olds agree on this fact. Seventy-one per cent of e-bankers rate time saving factors as the deciding factor. Of this number, 79 per cent of the 30–39 year olds and 66 per cent of 50–64 year olds agree on this fact (Fox 2002; Wada and Odulaja 2012). Perceived usefulness is relevant even among non-users although they take into consideration the disadvantages (Shi et al. 2008; Wu et al. 2010). These include perceived insecurity, lack of privacy, and vulnerability to victimization, when compared to traditional banking which is perceived as safer (Fox 2002; Wada and Odulaja 2012). Ease of use refers to the perception that a system is userfriendly. When customers are of the belief that a technology is complicated, or have no prior experience of working with technology, they are more likely than not to form the conclusion that the system is a complicated one (Shi et al. 2008). In China, it was found that persons who had no prior experience with technology were non-users of electronic banking, as they perceived the system too complex a process especially when compared with the measures of traditional banking where tellers are available to assist in delivering most of the services offered. In contrast, users of


electronic banking systems indicated that one of the many factors that influenced them to use electronic banking was the user-friendliness of the system (Bernard 2011; Wu et al. 2010). Similarly, in Finland, it was found that prior access to technology was highly correlated with adaption to electronic banking. Customers who indicated that they were exposed to computer technology or had computer training viewed electronic banking as useful and easy to use. This is consistent with a high level of self-efficacy towards technology based on past use of technology and its applicability to the banking industry (Karjaluoto et al. 2002). Customers are also motivated by reliability and userfriendliness of the services provided (Suganthi and Balachandran 2001). Irrespective of banking hours, customers expect the system to be up and running error free so that they may conduct transactions. The efficient and effective execution of transactions and the visibility of security infrastructure on the website are other factors that affect the decision of persons to embrace electronic banking as a preferred method (Bernard, 2011). More research has been done on the effect Internet banking has on customer loyalty and their level of trust in a bank. J.S. Benamati and M.A. Serva (2007) found that the distance created between banks and their customers through electronic banking can actually aggravate the relationship. This distance began with the introduction of the Automated Teller Machine (ATM) where customers had to build trust that a transaction had actually occurred when they deposited money or performed some other activity. The lack of face to face interaction meant there was no one to attest to the fact that a transaction had actually taken place. Electronic banking is asking the same thing, but taken to another level in that branches do not exist for


some banks. The authors note that, paradoxically, the lack of process of building trust will become harder for the bank, but will remain paramount for the customer. The Internet is unable to empathize; comfort or offer assistance in times of confusion or concern, and this may cause the user to foster feelings of distrust and frustration towards the bank. In these cases, customer care takes on an even more important role as the ‘face’ of the company.

Culture Studies have found that culture plays an influential role in the acceptance of electronic banking. In the Thai culture, for instance, the traditional method of banking is of great significance as it allows the customer to believe that their business is appreciated and valued by the bank. It was found that the face to face interactions as well as the personal relationships developed with the bank staff was of far greater importance than interacting with a machine ( Jaruwachirathanakul and Fink 2005). Furthermore, the alternative methods of banking, for example, ATMs and mobile banking, create some uncertainty. Similarly, in China, customers remain uncertain about the new technology (as it is uncharted territory in that country) and avoid its use at all cost. In the absence of strict regulation and legislation, customers are suspicious of this financial service, resulting in mistrust and avoidance. In both Chinese and Thai cultures, collectivism is practised. Therefore, the belief and attitude of the group will influence the individual perspective. In these cultures, customers tend to be resistant to change and are comfortable with traditional banking (Laforet and Li 2005).

Digital Divide and Geographic Location Lack of access to Internet and computer technology is not confined to developing countries, though the problem


is more chronic there than in developed countries. While banks do offer electronic banking services in most developing countries, a significant number of customers are unable to access these services because there is a digital divide. In Thailand, accessibility to Internet was identified as a fundamental determining factor for Internet banking adoption ( Jaruwachirathanakul and Fink 2005). The study revealed that lack of Internet access force potential users to continue to use traditional banking. This is also the case in Kenya as the banking industry is challenged by the low density of computer and Internet technology in the country while the few users of electronic banking are concentrated in the upper echelons of society among customers (Bernard 2011; Gikandi and Bloor 2010). Being then forced to find an alternative, it came as no surprise that banks forwent making electronic banking their primary target for customers and instead resorted to mobile banking (Bernard 2011; Gikandi and Bloor 2010). In Kenya, users of mobile banking (m-banking) services have surpassed traditional bank users, as there are currently eight million m-bankers in comparison to only four million traditional bankers.

KNOWLEDGE The level of technological awareness among customers is given important consideration in adaptation of electronic banking. Studies show that a lack of knowledge may affect their capacity to make a favourable decision towards electronic banking. Technical and financial illiteracy may negatively affect consumers’ perception of electronic banking (Eriksson, Kerem, and Nilsson 2005). S. Lichtenstein and K. Williams (2006), during their study, found that access to required knowledge and sources of assistance in Australia was below par and that even the service providers


themselves in the banking sector suffer from this problem. This has caused participants to be further disillusioned. The authors indicated that the prospective user should know how Internet banking works with suggestions including on-going training at the branches. One of the researchers’ major discoveries was that the banks need to provide more extensive and advanced support for their customers (Lichtenstein and Williamson 2006; Wu et al. 2010).

Cost Adjacent to convenience, transaction cost serves as a determinant in the adaptation of Internet banking. In his study, J.S. Huang (2003) used the theory of transaction cost economics to explain the pattern of consumers’ reduction when faced with the decision to choose between services offered by a traditional or an electronic market. Huang’s findings (2003) were substantiated by that of S. Fox (2002) who revealed that some 30 per cent of online bankers used the Internet as a way to save money. A survey conducted in 1996 by Booz Allen and Hamilton claimed that transaction costs for Internet banking were $USD0.01 cents per transaction while being $USD0.27 for the ATM, $USD0.54 for the telephone, and $USD1.07 to execute in a bricks and mortar branch (Hazell and Raphael 2001). These savings could easily be passed on to the customers in several ways. As mentioned before, many services were provided cheaper or free of cost online; also these banks can afford to have higher interest on savings since they do not have many of the overheads that banks with physical branches have, such as staff and rent. The Bank of China, Industrial and Commercial Bank of China and other merchant banks, in their promotion of electronic banking to their customers, boast that they offer several advantages, once such is reduced transactional costs.


Security During the embryonic stages of electronic banking, concerns surrounding the issue of security surfaced. The possibility for someone to gain access to the bank’s servers to change and erase information or upload a virus to cripple the entire service is always there, and is taken very seriously by the bank managers. Layers of protection against malevolent actors are utilized in the form of firewalls, access controls, encryption and decryption, verification of digital signatures, and public key infrastructure. Security is also enhanced through customer and staff education on good practices for using and maintaining the service. Nevertheless, the openness of the Internet and the existence of cybercrime are salient issues in today’s high-tech society. The arrival of this space has created a transition of crime to cyberspace. As such, criminals have derived new ways of committing their illegal acts with the added lure of concealment of their identity. To date this has served as a direct threat to the electronic banking community. Fear of crime has caused emotional, psychological and financial ruin to its victims. It forces citizens to take coercive measures, as they tend to avoid certain areas that are known to be crime prone. Instead they retreat to known areas of safety where they have put in place protective measures. Others have remained completely withdrawn, particularly those who have experienced victimization (Box, Hale and Andrews 1988). Interestingly, the fear of crime is greater than the levels of crime itself. Fear of crime in the real world has been transferred to cyberspace, which has implications for people’s view on cybercrime (C. Hale 1996). In the European Union (EU), research shows that cyber-attacks, fraud and data theft are all on the rise and that an estimated 15 per cent of bank customers actively stay away from Internet banking because of security concerns (Dapp 2012).


CONCLUSION While the reality of cybercrime is not something to be second-guessed, it has been proven repeatedly that the media heavily influences the fear of crime. This is so, as most persons get their information from media channels, which cause their views and perceptions to be molded by what is being publicized (Furedi 2006). However, there remains a fundamental problem, in that there appears to be a significant gap between the number of crimes represented by the media and the actual crimes. Studies show evidence of exaggeration of crime in the media (Reiner 2002). While empirical work on the fear of cybercrime is limited, there is speculation as to the legitimacy of the level of fear being observed in the literature and in public. While security companies regularly release statistics, the source is usually questionable or remains unmentioned. The relatively low conviction rate is also cause for doubt on the prevalence of cybercrime (Wall 2008). It is also recognized that there are stakes in the continued panic over cyber security as anti-virus developers continue to profit from their yearly subscription services. In the next chapter, we will explore many of these issues.

Fear of Crime

A HISTORY OF RESEARCHING ‘CRIME’ Historically, research on crime was concerned almost exclusively with the possible motivations of men that broke the law. D. Lewis and G. Salem (1986) argued that out of this concern with motivations, came the desire among policy planners to enact crime prevention programmes aimed at reducing these motivations. According to Lewis and Salem, two contrasting theories were integral to charting the direction of crime prevention practices. These were differential association theory (Sutherland 1939) and the theory of strain (Merton 1938). Despite their contrasts, both theories supported the notion that crime was learnt behaviour, and located social status as the focal point of the analysis of crime. The subsequent failure of crime prevention strategies to bring about any meaningful reduction in crime forced a rethink among policy planners, regarding the manner in which the crime problem should be analyzed. The result was a shift in focus away from the offenders, which had preoccupied the minds of researchers to that point towards the victims (Lewis and Salem 1986). No longer would the sole focus of crime research be on the motivations of offenders, as consideration would now be given to the impact of victimization on individuals and the wider community. Although historians have recorded concern regarding escalating levels of crime from as early as the nineteenth century (Shore 1999); reliable information on the reaction


of the public to crime was virtually non-existent before the 1960s with the issue of crime given very little attention in public opinion polls before this time. It was not until detailed questions relating to crime were included in such polls in the United States that the fear of crime as an area of study emerged (Biderman, Johnson, McIntyre and Weir 1967; Furstenburg 1971). Pioneering empirical work on the fear of crime was the bi-product of early victimization surveys that were designed to obtain an accurate representation of crime in light of the deficiencies of official data. These surveys concentrated primarily on major crimes such as rape, assault, murder, burglary, and robbery. Data on fear of crime at this point was collected due to the presumed linear relationship between fear, and actual levels of crime (Lewis and Salem 1986). Collecting data on fear therefore, would act as a check on the levels of crime reported by the respondents. The primary objective however, was the collection of data on the incidence of major crimes. The catalyst for research specifically designed to obtain data on the fear of crime is widely believed to be the Commission on ‘Law Enforcement and the Administration of Justice’ launched by American President Lyndon Johnson in 1965 which shared many of the characteristics of contemporary surveys on fear of crime. The Commission was instituted with the goal of determining: …precisely what aspects of crime Americans are anxious about; whether their anxiety is a realistic response to actual danger; and how anxiety affects the daily life of Americans (President’s Commission 1967, 49).

Empirical data for this report were provided by the results of three crime surveys (Biderman et al. 1967; Ennis 1967; Reiss 1967). The report highlighted the manner in which

Fear of Crime ¦ 23

the quality of life of many Americans was being negatively affected as a result of concerns about levels of crime. Results from two communities revealed a considerable change in the daily habits of residents due to concerns for safety. As many as 43 per cent of respondents reported that they had decided to stay off the streets at night; 35 per cent chose to no longer speak to neighbours; and 21 per cent used cars or taxis at night as opposed to walking. An important feature of these studies, and a characteristic that would heavily influence the future direction of fear of crime research was the comparison between fear, and the actual (official statistics) threat of victimization – a relationship that as previously stated, was presumed to have been linear. However, it became apparent that fear was not determined by the actual threat faced by respondents, suggesting that it was influenced not by personal circumstances, but by other intervening factors (Farrall, Gray and Jackson 2007). The study nevertheless concluded that this fear was a logical response to a person’s personal environment in that it was attributed to the general escalation of crime in societies and neighbourhoods (The President’s Commission on Law Enforcement and Administration of Justice 1967). Indeed, this was a period of increased unrest and urban violence in the United States, which led to the development of a general panic over crime. Fear of crime was seen as symptomatic of this climate (Furstenburg 1971). Similarly, the spread of fear of crime research outside of the United States was precipitated by crime and public anxieties regarding crime, becoming important issues within the political arena. The British Crime Survey was established by the Home Office in order to temper the panic caused by right wing politicians regarding crime in the United Kingdom (Hall, Critcher, Jefferson, Clarke and


Roberts 1978). Like the President’s Commission conducted in the United States, the British Crime Survey had as its mandate, the measurement of crime not captured by official statistics, as well as the assessment of individual fear of crime. The initial findings reflected a similar trend to that found in the United States. High levels of fear were reported, particularly among groups such as women and the elderly, whose actual threat of victimization was not necessarily reflected in official statistics (Farrall et al. 2007). In response, the Home Office, fuelled by the belief that the fear of crime was an irrational response to public hysteria, stressed that it was an issue distinct from crime, and should be analysed as such (Hough and Mayhew 1983). Early efforts at measuring fear suffered from considerable criticism, particularly for their theoretical deficiencies (Ferraro and LaGrange 1987; Figgie 1980). J. Garofalo and J. Laub (1978) for example, argued that the instruments used were more suitable for an appraisal of urban insecurity and suggested a series of questions that would more accurately measure fear. Despite these criticisms however, these studies were integral to providing a base for future empirical work in the area. Lewis and Salem (1986) identified two ways in which early work demonstrated the link between victimization and fear. The individual fear profile was concerned primarily with demographic characteristics and the manner in which these interacted with victimization and fear of crime. In contrast, the neighbourhood assessment approach focused on the role that environmental factors played in affecting the expectation the respondent had, that crime would occur in their locale. These studies served as the stimuli for large-scale interest in the fear of crime among scholars and practitioners over the next 40 years (Lee 2007). Indeed, fear of crime has emerged to play a major role in determining the research agendas of

Fear of Crime ¦ 25

criminologists throughout the world. This growth in interest occurred alongside an increase in the general concern for the victims of crime assisted by the coverage afforded by the media to victimization and the results of studies such as the British Crime Survey. Whereas initial interest was generated because of an increase in awareness of victimization, more recent interest has been fuelled by a desire to understand why some social groups are more prone to fear of crime than others (Ferraro 1995).

DEFINING FEAR OF CRIME Despite the dominant literature on challenges to electronic banking, not much research has focused on fear of cybercrime as a factor, which threatens electronic banking. The reality is that fear of cybercrime is an emerging area in the electronic banking space, and based on the value of the fear factor in the ‘fear of crime literature’, it is important to further explore this fear of cybercrime in the electronic banking space. The conceptual base is an extension of the fear of crime conceptual framework established in the works of S. Box, C. Hale and G. Andrews (1988), C. Hale (1996); and U. Gabriel and W. Greve (2003). Fear of cybercrime is an important challenge to the electronic banking industry. To understand the phenomenon however and its implications for banking customers, a clear understanding of the general concept of fear of crime is essential. To an extent, theoretical explanations of the fear of crime can be transferred and applied to understand the fear of cybercrime. To date however, criminologists have had difficulty establishing a universally accepted definition of the fear of crime. K. Ferraro (1995) proposed that the fear of crime was an emotional response to ‘dread or anxiety about


crime, or symbols that a person associates with crime’ (3). J. Garofalo, (1981) argued that modern conceptualizations of fear of crime must be careful to make the distinction between ‘actual’ and ‘anticipated’ fear. The response of someone who is walking alone on the street in an area known for its crime (actual) would be considerably different from that of someone describing how they would feel were they faced with that situation (anticipated). Garofalo believed that, in reality, actual fear, was chronic in a relatively small number of people, but occurred on isolated occasions for most. As such, he argued that any accurate definition and measurement of crime, must take into consideration the situation, as well as the frequency of experiencing such a situation. In addition to defining fear of crime, criminologists have also attempted to identify a fixed set of variables that either directly or indirectly contribute to an attitude of fear of crime among individuals (Box et al. 1988; Furedi 2006; Reiner 2002). The various explanations of the fear of crime have typically been classified under the following headings: vulnerability, environmental clues and conditions, personal knowledge of crime, and victimization, confidence in the police and criminal justice systems, perceptions of personal risk and seriousness of various offences (Box et al. 1988).

WHAT CONSTITUTES FEAR? Definitions of fear have traditionally centred on the threat to the wellbeing of an individual (van der Wurff and Stringer 1988). One feature of these early definitions is the use of the term anxiety interchangeably with fear. D. Chadee, L. Austen and J. Ditton (2007) cautioned against this practice, arguing instead that they should be treated as two separate

Fear of Crime ¦ 27

constructs. M. Hough (1995), made the distinction between anxiety and worry – in that anxiety related to the perception of risk as highly likely, while worry was not necessarily in keeping with actual risk. Similarly, Anthony Harriott (2004) defined worry as it relates to crime, as somewhat irrational, and typically being in conflict with actual levels of crime while anxiety was a rational reaction to actual levels. With this in mind, fear could be viewed as a manifestation of anxiety and worry, whereby the result is dependent on the interaction between the two constructs (Kinlocke 2008). Another critique of traditional definitions of fear has been the failure of researchers to distinguish between fear and the perception of risk or of a threat. As such, measures of risk of victimization have often been confused with measures of fear (Ferraro and LaGrange 1987; Ferraro 1995). The perception of risk should instead be viewed as one of the critical factors that can influence fear of crime (Box et al. 1988; Ferraro 1995). Risk is said to exist once an individual is placed in a situation of vulnerability in which the vulnerability of the situation is subjectively determined by the victim. However, much more is required for the quantification of fear. For there to be fear of crime, at least three components must exist; ‘the individual’s cognitive perception of being threatened (C), a corresponding affective experience (A) and an appropriate motive or action tendency (M)’ (Gabriel and Greve 2003). It is impossible to experience fear of crime in the absence of these three components interacting. Table 2.1 provides a detailed explanation of the varying ways these components can interact.


Table 2.1: C-A-M combinations and Attributed State

Source: Gabriel, U., and Greve, W. 2003. The Psychology of Fear. British Journal of Criminology, 43, 600–14.

DETERMINANTS OF FEAR Physical Environment There is a well-established spatial element to fear of crime as people commonly indicate that their fear of personal and property crime is at its most intense when in particular environments (Pain 1997; van der Wurff and Stringer 1988). These environments tend to be those which are characterized by dark, lonely, poorly maintained areas (Vrij and Winkel 1991). Despite the vast number of factors contributing to the fear of crime among citizens, numerous researchers have noted that the fear of crime is mostly attributed to the perception that ‘people may come to be fearful of criminal victimization because they perceive their immediate environment to be threatening (Box et al.

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1988, 2). This fear can be either dispositional or situational. Whether or not an individual experiences one of the two is dependent upon the situation at hand. Where an individual is said to be fearful in situations such as walking alone at nights, living in a crime-ridden neighbourhood or talking to a stranger, that individual is said to have a situational fear of crime. This is so, based on the fact that fear is provisional and changes with the situation at hand. The work of the Chicago School was integral to an understanding of the manner in which the physical atmosphere can influence feelings of fear (Shaw and Mckay 1942). S. Smith (1987) too, argued that an individual’s place of residence was critical in determining their level of fear. This is particularly relevant within the Caribbean context in which large numbers of urban residents live in poor, deprived neighbourhoods beset by incivilities such as abandoned buildings and the persistent loitering of young men on the corners of the streets and lanes. These environmental incivilities have long been associated with the phenomenon of fear of crime. A number of researchers have argued that people’s anxieties, related to the quality of their immediate environment are often translated into fear (Bailey 2006; See also, Hale, Pack and Salkeld 1994; Hunter and Baumer 1982; S.J. Smith 1985; 1986). They are confronted with symbolic or actual threats and their perceptions of what is a dangerous situation are shaped not only by experiences, but also by certain cues that the environment is threatening. However, when these situations occur repeatedly, then the fear may become dispositional (Gabriel and Greve 2003). In contrast, the dispositional fear of crime connotes the experience of numerous situations that may inspire fear in individuals, leaving them prone to the acquisition of fear in given circumstances which may occur more intensely. Therefore, persons with such a disposition


are likely to experience the state of ‘being afraid’ more often than not in distressing situations (Gabriel and Greve 2003). The focus of research into fear and the physical environment has been almost exclusively on urban spaces with relatively little attention paid to that which occurs in rural areas. Work that has been done has however tended to support the notion that fear of crime is indeed considerably lower in rural areas (Hough 1995; Yarwood and Gardner 2000).

Social Vulnerability In addition to the physical disadvantages described above, individuals may also feel more vulnerable to crime as a result of conditions of social disadvantage. Social vulnerability refers to those social characteristics that may increase an individual’s perceived level of threat to their safety (Rader, Cossman and Porter 2012). Typically, the characteristics most often associated with social vulnerability within the literature have been socio-economic status and race. The large number of urban poor residents within the Caribbean and elsewhere that emerge as perpetrators of crime has placed those towards the lower end of the social scale as the objects of the fear of the more affluent. Research on class and fear, though limited, has however, suggested that greater levels of fear, in fact, exist among the lower classes than the middle and upper classes (McKee and Milner 2000; Taylor, Gottfredson and Brower 1984). C. Pantazis and D. Gordon (1997) for example, found that those living in conditions of multiple deprivation were three times as likely to be fearful of crime than those in more affluent circumstances. In a similar vein, research has also found the homeless to display particularly high levels of fear (Kiphe, Simon, Montgomery, Unger and Iverson 1997). These findings have

Fear of Crime ¦ 31

been attributed to a variety of factors. As discussed earlier, certain spaces encourage greater levels of fear. The isolation and exclusion experienced by particular sectors of society however render them prone to existing within these spaces and thus maintaining high levels of fear. it has also been suggested that as a result of the knowledge that members of society view them as dangerous and threatening, those from lower socio-economic groups in turn experience fear. In this case, feared and being feared are operating simultaneously (Sibley 1995). Other explanations put forward have included the notion that there may exist the feeling among those from lower classes that they are more susceptible to victimization as a result of their dangerous surroundings. In addition, they do not have the means to engage in measures aimed at target hardening such as sophisticated security systems (Pantazis 2000; Rader et al. 2012). Finally, those living in poverty may lack the suitable social networks that would otherwise enable them to mitigate the effects of victimization (Hale 1996). Consensus on the issue has not been achieved however, as others have suggested that greater levels of fear exist among the middle and upper classes since they believe that they have considerable property to lose (Kinlocke 2008). Research relating to the interaction between ethnicity and fear is even sparser and has been conducted primarily in developed countries such as the United States. There is empirical evidence to support the notion that minority ethnic groups display higher levels of fear than whites (Ferraro 1995; Melde 2009). Indeed, J. Covington and R. Taylor (1991) posited that fear was particularly high in predominantly African American neighbourhoods. Similarly, research conducted in Britain has typically demonstrated there to be higher levels of fear among ethnic minorities than whites. L. Allen (2006), illustrated the inflated levels of fear among


those from Asian and black backgrounds, as they reported considerable concern about crimes such as burglary, car theft, and violent crime. A number of contemporary studies have found however, that the relationship between ethnicity and fear varies depending on factors such as age or sex (Melde 2009). African American women for example, have been shown to display higher levels of fear than their male counterparts (Cobbina, Miller and Brunson 2008). There remains however, a paucity of empirical evidence to support these views within the Caribbean context.

Perception of Risk As stated earlier, rather than being used synonymously, it is important to recognize that one’s perception of risk has a direct association with the perception of fear. Risk perception was conceptualized by L. Sjoberg, B. Moen and T. Rundmo (2004) as the valuation of the likelihood of an occurrence of a particular type of accident and one’s concern with the impending implications. Contributing to its subjective estimation is the absence of established scales to measure risk perception, which leaves room for bias. Consequently, the perceived risks far surpass the extent of the looming consequences. This is no surprise, as the possibility of miscalculation among the average human being has always been very high, which leads to a very high level of apprehension towards the perceived risk (Altheide and Michalowski 1999; Jackson 2009; Sjoberg et al. 2004; Slovic, Fischhoff and Lichtenstein 1982). Various researchers have also established that the link between an individual’s perceived level of risk and the actual risk that they may face is often weak. Therefore, empirical studies have found that the belief that one is likely to become a victim of a crime does not necessarily correspond with the actual reports of

Fear of Crime ¦ 33

victimization; and those deemed to be living in fear of crime far outnumber those exposed to criminal victimization. This phenomenon has traditionally been referred to as the ‘cultural bias of risk’ (Douglas and Wildavsky 1982), or the ‘social amplification of risk’ (Kasperson et al. 1988). Such biases in decision-making have been attributed to a variety of stimuli related to individual psychology including experience, optimism, knowledge and emotion all of which may combine, or act in isolation to produce unrealistic assessments of risk (Chadee et al. 2007; Kahneman, Slovic and Tversky 1982). D. Chadee et al. (2007) concluded that risk and fear cannot be assumed synonymous and are indeed separate constructs. Risk, they argued, had its origins within a cognitive dimension, while fear is located within an affective state. Individuals therefore determine risk through ‘heuristic biases’, the result of which is often an overestimation of likelihood (Chadee et al. 2007). The perception of risk can also be affected by an individual’s self-efficacy. Persons with a high level of selfefficacy tend to perceive themselves as being capable to withstand threatening situations. Therefore, they will not perceive the magnitude of the threat as being as insurmountable as someone who has a lower self-efficacy. The rationale is that possessing a high level of self-efficacy conditions an individual to function normally when faced with fearful situations, as they believe that they are more capable of influencing situations and facing challenges more competently. In light of this, it is expected that a dispositional threat will have less of an impact on persons with a higher level of self-efficacy ( Jackson 2009; Slovic et al. 1982).


Knowledge of Crime Fear of crime also results from person’s knowledge of crime. This knowledge is obtained from a wide array of sources which may include one’s own experience with crime. This experience may be the result of either direct or indirect victimization (Lewis and Salem 1986). As discussed earlier, the relationship between victimization and fear of crime is complex, and no clear consensus exists. Despite the abundance of literature suggesting that the link between victimization and fear is weak (Douglas and Wildavsky 1982; Dull and Wint 1997; Kinsey 1984), there is also evidence within the literature to suggest the opposite. Proponents base this belief on the notion of personal control, which is affected by individual experiences (Bandura 1977; Gecas 1989). Direct victimization therefore erodes feelings of personal control (Lurigio 1987; Macmillan and Hagan 2004). The perceived removal of the agency, which characterizes personal control, as a result of criminal victimization, alters notions of security, leading to fear (Macmillan and Hagan 2004). The causal link between victimization and fear of crime has also been attributed by some to the fact that an individual must first be aware of a threat before perceiving it to be dangerous. In essence, this is the first stage of fear acquisition; the presence of a threat has to be accompanied by a cognitive perception which facilitates the distinction between threat and impending danger (Gabriel and Greve 2003; Heath and Petraitis 1987). A number of studies have empirically demonstrated the association between previous victimization and fear of crime. Work in the area of school violence has illustrated this link (Swartz, Reyns, Henson and Wilcox 2011; Tillyer, Fisher and Wilcox 2011). Research examining community violence has also concluded that ‘people who have been

Fear of Crime ¦ 35

victimized, particularly in their neighbourhood…will tend to be more afraid’ (Box et al. 1988, 3). C. Hillinski, K. Pentecost Neeson and H. Andrews (2011) also found that among their sample of US women, prior victimization was cited heavily as the reason for present levels of fear. This was attributed to the dismantling of the ‘it can’t happen to me’ notion, making the victim more aware of the possibility all types of victimization and thus increasing levels of fear. Evidence from the Caribbean has also supported this link with Harriott (2003) indicating that previous victimization was a useful predictor of anxiety about crime. Where the effect of direct victimization is negligible, indirect victimization is believed to play the critical role in determining levels of fear. Generally, indirect victimization has been found to be more closely related to levels of fear than that of direct. Indirect victimization may include personal relationships with the victims of crime, or secondhand accounts of acts of crime through various channels such as word of mouth or the media. P. Rountree and K. Land (1996) for example, argued that the nature of neighbourhood interactions, in which there is frequent contact, increases the likelihood that neighbours will learn of incidents of crime to which residents have fallen victim. This in turn leads to a fear of crime that may not necessarily be supported by official statistics (Taylor 1996).

Gender There is general agreement within the literature that gender is a reliable indicator of fear. Indeed, that women report higher levels of fear than men is one of the most consistent findings within fear of crime literature (Ferraro and LaGrange 1987; Ferraro 1995; Schafer, Huebner and Bynum 2006; Snedker 2010; Warr 1984). M. Ramsay


(1989) for example, reported that among his British sample, mugging was a significant fear among 71 per cent of women while the same was true for only 47 per cent of men surveyed. Similarly, L. Allen (2006) found that women in Britain were four per cent more likely than men to be fearful of burglary. These findings are particularly interesting considering that with the exception of sexual assault, women are generally less likely to become victims of crimes than men (Ferraro 1996; Snedker 2012). There have been exceptions to this trend however. For example, it is believed that men are more fearful of car-related theft than women. Generally however, the relatively higher levels of fear reported by women appear to be consistently prevalent even when controlling for variables such as age and location (Kennedy and Krahn 1984; Kinlocke 2008). As such, research on gender and fear of crime has tended to focus on the factors influencing male versus female fear. Various explanations have been suggested for the variation in levels of fear between the sexes. J. Goodey (1997) attributed the apparent lack of fear among men to the development of a masculine bravado, which stems from emotional vulnerability. The result of this is the aggressive behaviour commonly seen among men, accompanied by a denial of vulnerability. The literature on fear and gender has however been characterized by the existence of two contrasting explanations. The vulnerability hypothesis argues that the inflated levels of fear experienced by women are the result of a belief that they are physically and socially weak. An inherent vulnerability exists among women due to the knowledge that they may not be physically strong enough to fend off an attack, nor possess the financial resources to replace property lost (Baumer 1978; Hindelang, Gottfredson and Garofalo 1978; Madriz 1997; Stanko 1995). In addition

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to an objective analysis, which suggests that women on average do tend to be physically weaker than men, this vulnerability can also be analysis subjective in that women’s vulnerability is increased as a result of their sub-ordinal position within patriarchal societies (Smith, Torstensson and Johansson 2001). Harriott (2004) revealed from a Caribbean perspective that worry and anxiety were linked to a lack of power generated by gender identity. Secondly, the shadow of sexual assault hypothesis (Ferraro 1995), maintains that among women there is a focus on their vulnerability to the crime of rape, which they subconsciously translate into a general fear of crime. Women have been found to be as much as ten times more likely than men, to be the victim of a rape or sexual assault (Hilinski et al. 2011). These crimes therefore, are argued to be the focal point of fear for many women and that their perceived fear of crime is actually a fear of rape (Warr 1984). Women are, for example, more fearful than men of being a victim of burglary because they are afraid that the burglary may lead to a sexual attack (Ferraro 1995). Ferraro therefore concluded that rape acted as a ‘master offence’, increasing the level of sensitivity among women, towards other crimes. The shadow of sexual assault hypothesis has received much support within the literature (Fisher and Sloan 2003; Lane and Meeker 2003; May 2001).

IMPLICATIONS OF FEAR OF CRIME The utility of research into fear of crime lies in the consequences that it has as a social problem. The fear of crime can have several repercussions, which alter one’s quality of life, as precautionary measures are taken in order to fundamentally constrict daily activities and social interactions. Avoidance or protective measures are typical


of those living in fear of victimization (Keane 1998; Liska, Sanchirico and Reed 1988; Warr 1984; 1985), whereby avoidance involves measures taken to ensure that individuals do not find themselves ( Jaruwachirathanakul and Fink 2005) in threatening situations, while protective measures aim to reduce the risk of being victimized when exposed (Skogan and Maxfield 1981). Avoidance and protective measures were the focus of a number of investigations into fear of crime at Ohio State University (Nasar and Jones 1997). The studies revealed a pervasive environment of fear in which 50 per cent were concerned about routes that they regularly traversed on campus. Importantly, 73 per cent indicated that they chose to avoid areas deemed unsafe, while 91 per cent indicated that they would carry a form of protection with them if they had to travel along a perceived dangerous route (Nasar and Jones 1997). The emotional and practical costs of fear can indeed have far-reaching consequences. This fear within the Caribbean has caused major shifts in contemporary living. There has however been a normalization of adjustments such that people have become unaware of the extent to which civil liberties have been affected by often debilitating levels of fear (Kinlocke 2008). Fear has disrupted the networks that facilitate collective action across the region – networks related to work, leisure, and public life. There has been a restriction of both physical and social space. Fear of crime therefore threatens good governance and the sustainable development of urban communities. In response to this fear and in an attempt to improve security, individuals and firms incur increased security related costs as a result of target hardening. Vulnerability reduction measures within the Caribbean consume a considerable share of public and private resources. Measures

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such as grills, alarms, security personnel and other strategies are all utilized in order to make homes and businesses less attractive targets. In Jamaica, for example, the use of private security guards has increased rapidly over the past 20 years due to increased fear of victimization; and firms in Jamaica spend an average of J$1m on private security (Francis, Harriott, Kirton and Gibbison 2003). The Caribbean region loses large numbers of residents to migration every year, the majority of which are highly educated and skilled. They constitute the sector of the population that is in high demand in Organisation for Economic Co-operation and Development (OECD) countries (Nurse 2004). It has been argued that the fear of both personal and property crime is a major factor in the migration of residents from countries in the Caribbean (Bonnick 1992). Indeed, a survey among migrants conducted by the Sunday Gleaner newspaper in Jamaica found that the majority cited crime and economic betterment as reasons for leaving (Rose 2005). Those affected by the fear of crime may also capitulate under the pressure as they engage in ‘avoidance behaviours’, which may ultimately cause them to become recluses. This may have a domino effect (Mycoo 2006) as one’s self-efficacy may be lowered and the fear of crime amplified. The rapid growth of gated communities provides a useful illustration. There has been a worldwide increase in the number of gated communities. Alongside this, Caribbean countries have seen a growing number of persons retreating into these fortified spaces in order to reduce the opportunities for victimization (Blakely and Snyder 1997; Caldeira 2000). M. Mycoo (2006) indicated that fear of crime is an important factor in the rise of gated communities in the Caribbean and Latin America. She argued that cuts in public spending, unemployment and


poverty during the post structural adjustment period of the 1980s led to an upsurge in crime. This in turn, led to a fervent demand among the middle and upper classes for residential security (Webster 2001). This practice can have the effect of heightening vulnerability and the perception of personal risk since the retreat of the middle class behind these walls produces an environment that intensifies fear. Residents internalize the message that the outside world is unsafe therefore leading to feelings of fear and paranoia. This fear negatively affects the individual’s health although the relationship is somewhat intricate. Nevertheless, research has demonstrated a clear association between heightened fear of crime and a deterioration in mental health as individuals grapple with bouts of panic and anxiety ( Jackson and Stafford 2009). Common psychological effects include sleeplessness, anger, frustration, helplessness and other negative feelings (Ferraro and LaGrange 1987; Warr 2000). Fear of crime has also been linked to a variety of physiological issues including decreased salivation, increased heart rate, and breathing issues. In addition, physical agitation, drops in body temperature, inability to move, involuntary release of bowels, nervousness and sweating have all been found to result from concern due to crime (Kovecses 1990; Warr 2000). These can lead to environments which dilute trust, resulting in decreases in physical activity and social interactions considered protective for mental health (Roberts and Indermaur 2002). Without these, individuals are at risk of mental illnesses such as depression and long-term trauma (Spelman 2004). Particularly vulnerable are those living in environments that are both socially and physically impoverished as the environment is closely related to the psycho-social state.

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Fear can in turn have an indirect effect on levels of crime as the undermining of social consensus and trust can reduce the community stability and cohesion that are so vital to the perseverance of order; thereby contributing to the occurrences of crime (Wynne 2008). The ‘Broken Windows’ hypothesis (Wilson and Kelling 1982) has been widely used in order to explain one of the ways in which fear can in turn lead to crime. Central to this is the association between disorder and fear. Disorder and incivilities lead to fear as residents perceive these as evidence that social order is breaking down. As a result, they withdraw from the community by means of modifications to their activities and behaviour. The effect of this is a further reduction in the level of social control, as roles of mutual support with fellow citizens are relinquished (Taylor 1999; Wilson and Kelling 1982). The absence of social order causes crime to increase as criminals, operating under the belief that the likelihood of apprehension is now small, increase their offending.

ECONOMIC IMPLICATIONS OF FEAR OF CRIME The economy has suffered significantly from the revenue fall-offs caused by the fear of cybercrime. One of the most devastating economic effects is the loss in business confidence in the emerging digital economy. Now more than ever, online transactions are becoming increasingly popular as more companies try to expand their market share by tapping into this new fountain of wealth as it is viewed by customers as cost efficient, time saving and more convenient. The fear of cybercrime has, however, undermined this very important aspect of modern commercialism, which has gross effects on the domestic and global economy. The true scale of losses is difficult to compute; however, the Cyber-security Industry


Alliance has regarded this loss of consumer confidence in the digital economy as a billion dollar problem (Campbell 2010). In 2008, almost one in three of all shoppers in the United Kingdom ceased online shopping citing lack of trust and fear of security breaches as their main reasons for doing so. Increased Internet fraud is another reason for the growing lack of trust; this is true particularly in cases where credit card fraud is prevalent. Consequently, in 2008, the British economy suffered £328m in losses as a result of credit card fraud and the resulting decrease in online shopping (Campbell 2010). Financial services also suffered considerably. This is attributed to the rise in phishing attacks. For example, Internet banking in North America declined due to this phenomenon coupled with growing identity fraud and online scamming as 80 per cent of phishing attacks in the first quarter of 2008 were directly against Internet banking customers. Various scholars have identified reasons why electronic banking is not as prevalent as one would expect given the benefits; fear concerning banking security was the number one reason for person’s reluctance to adopt electronic banking. Australian investigator, M. Sathye (1999) found that consumer confidence in security was low while Ramsay and Smith (1999) discovered that privacy was the number one concern. What is interesting to note is that D. Hain, H. Tootell and C. Alcock (2002) discovered that offline customers were more fearful about security and privacy issues than online customers. When potential customers are scared of conducting online transaction it not only undermines the online aspects but also the confidence in the entire company as a whole. This of course will have implications not only in terms of profit but also investment; potential investors will become

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unwilling to invest in a company that the market has no confidence in as they would essentially be investing in a loss making entity. This turn of events will naturally lower their share prices which, when coupled with low investment, will result in huge losses for the company. One such example happened in 2009 when US payment processor, Heartland Payment Systems, experienced significant divestment which cut its stock prices in half following the creation of a malware enabled data breach, which had the possible effect of compromising millions of credit and debit card transactions. Study has shown that in the United States 150 million potential electronic banking consumers refrained from this practice as a result of the fear of cybercrime. The TriCipher Consumer Electronic Banking Study, conducted by Javelin Strategy & Research (Pleasanton, Calif.) for TriCipher, a Los Gatos, California based authentication solutions provider, estimates that US$8.3 billion per annum would flow into the bank’s coffers should customer confidence in electronic banking increase.

CURRENT RESEARCH INTO THE FEAR OF CRIME Today, research into the fear of crime has grown such that it occupies a dominant position among the scholarly writings of criminologists as well as other academic disciplines. A characteristic of its growth has been the continued spread of research outside of the United States to include countries such as the United Kingdom (Pain 1997; Smith 1985) and Australia (NCAVAC and Attorney General’s Department, Criminology Research Council 1998; Tulloch 2000). Some studies have reported as many as 60 per cent of respondents feeling some level of fear (Thomas and Bromley 2000). Others have demonstrated the manner in which fear has


increased over time. The John Howard Society of Alberta ( JHSA) (1999) for example, indicated that fear among the Canadian population had increased from 72 per cent in 1990, to 77 per cent in 1997. Research in developing countries remains sparse but there is increasing evidence from countries such as Jamaica, and Trinidad and Tobago, of the chronic nature of fear among both men and women (Chadee et al. 2007; Harrendorf, Heiskanen and Malby 2010). One of the shortcomings of current research into fear of crime has been the scarcity of empirical data which focuses on offence specific fear. M. Alper and A. Chappell (2012) referred to this as one of the major failings of research to this point. Alper and Chappell (2012); M. Warr and C. Stafford (1983); and Mark Warr, (2000), examined among residents in Seattle, the fear exhibited towards a variety of offences. Since this publication however, attempts at measuring fear have typically been characterized by global measures. The importance of measuring offence-specific levels of fear has been articulated within the literature (Ferraro 1995; Haghighi and Sorensen 1996; S. Moore and Shepherd 2007) but to date, only scattered examples exist. The importance of conducting crime specific investigations into fear is illuminated, the moment one accepts that fear of different crimes may have different causes (Miethe and Lee 1984). The specific causes of fear of property crime versus fear of violent crime, for example, would be lost if a single measure of fear is used, thus producing misleading results (Alper and Chappell 2012). Despite these findings, however, and despite the rapid proliferation of studies relating to fear of crime over the past four decades, its complex nature means that the subject area remains a fertile topic of enquiry. There is, however, a need

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to continue to improve our understanding of the nature of fear. Indeed, the study of fear of crime to this point has much room for improvement and challenges scholars to broaden their scope of investigation. The Caribbean in particular, with its high rates of crime, provides a useful opportunity to explore unique avenues towards understanding this phenomenon. The study of fear as it relates to the growing problem of cybercrime is in keeping with this need.

Cybercrime

CONCEPTUALIZING CYBERCRIME Usage of the term ‘cybercrime’ has become quite popular but many have encountered difficulty in accurately defining and objectifying the concept. Furthermore, there is no single term to characterize the tools and software used in several online crimes. In the next two sections, we comprehensively define cybercrime and explore its breadth by examining its different categories (Gordon and Ford 2006). To date, there are varying definitions of cybercrime. The existing definitions have developed experientially and vary based on ‘the perception of both observer/protector and victim and are partly a function of computer-related crimes geographic evolution’ (McQuade 2006). For example, The Council of Europe’s Cybercrime Treaty uses the term ‘cybercrime’ to refer to offences ranging from criminal activity against data, to content and copyright infringement. Today, this definition is broader, including activities such as fraud, unauthorized access, child pornography, forgery and unauthorized access, lotto scamming and cyber-stalking (Zeviar-Geese 1997–98). Based on these definitions, it appears that for a crime to be qualified as cybercrime, it must be committed with the aid of a computer. However, based on S. McQuade (2006) and D.I Speer’s (2000) definitions, it is evident that cybercrime can be committed using different types of Information Communication Technologies (ICTs).

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Cybercrime is extremely extensive in scope as it encompasses pre-existing crimes assisted by technology as well as the creation of new ones. Most ostensibly, cybercrime may be described as any criminal offence committed using the computer (Kierkegaard 2005). Cybercrime consists of two distinct categories: computer-related crime and computer crime. Computer-related crime entails the committing of conventional crime such as various methods of fraud, stalking and forging documents with the aid or assistance of a computer technological device. Computer crime, on the other hand, is more recent as the computer technological device is the modus operandi (the primary tool used to perpetrate the crime) and the main targets are usually other computer networks (Kierkegaard 2005; McQuade 2006). Instances of computer crime include hacking into government and corporate files, releasing viruses and other illegal acts. Computer crimes exist only in the technological realm and require exceptional levels of expertise, knowledge and skill by the perpetrator (Kierkegaard 2011).

HISTORY OF CYBERCRIME The concept cybercrime represents what appears to be the product of a rather dynamic process. The trajectory of cybercrime, when traced, reveals that when this term first emerged it was clouded in confusion. Its history dates back as far as the Second World War, when computers were used by the United States to decrypt coded messages. During this period (1958) the term, ‘computer related crimes’, was used to describe crimes committed with the aid of computers. Throughout the 1960s, terms such as ‘corporate and economic crime’, were used to describe crimes involving corporate or university computer systems. In the 1970s


and 1980s, more modern concepts were developed by researchers to describe crimes such as wire and telegraph frauds, crimes committed by white collar professionals, who used computers in illegal ways (Brenner 2007). These terms ranged from high tech crimes to new age crime and so on. In the early 1990s practitioners, scholars and policymakers were at a crossroads when faced with the task of finding a label for the emerging forms of Information Technology (IT) enabled crimes. By the mid-1990s, some of the explored concepts included: • Computer related crime • High technology crime • Economic crime and technology based crime • New age crime • Computer and Internet related crime • Computer assisted crime • High tech crime • Digital crime • Electronic crime • Internet crime The term cybercrime was first coined by Sussman and Heuston in 1995. Amidst the many crime labels being introduced through the media and popular literature, cybercrime caught on and became very popular with the general public because it sensationalized the reality that networked computers were being used in combination with other electronic devices to commit new forms of crimes (McQuade 2006). Between the 1950s and late 1980s, occurrences of cybercrimes were sporadic and were confined to the

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internal borders of the United States and the United Kingdom –countries that were pioneers in the recurrent use of information technology (Rothenberg 2003). By this time, information technology systems had been infiltrated by phone breakers, hackers and fraudsters whose attacks, though criminal in nature, were considered to be a minuscule and insignificant threat to the sovereignty of the nation state (Rothenberg 2003).

IMPETUS FOR THE GLOBAL NATURE OF CYBERCRIME A significant number of studies have found that the prevalence and transcending nature of cybercrime is directly linked to globalization. According to Rothenberg (2003, 7): Globalization is the acceleration and intensification of interaction and integration among the people, companies, and governments of different nations. This process has effects on human well-being (including health and personal safety), on the environment, on culture (including ideas, religion and political systems) and on economic development and prosperity of societies across the world. The revolutionary force of globalization has led to the establishment of a single global information society characterized by a reduction in borders, interdependence, integration among states and relocation of business in cyberspace (McCusker 2006). More specifically, globalization has ushered in the era of advancement in ICTs; the result of a transformation from industrial to ‘postindustrial society’/‘information society’ often referred to as the ‘digital society’. While this super information society continues to expand and progress, providing efficiency, among many other benefits for government and society, technological expansion


and advancement are not without their shortcomings as parallel threats have become more apparent with new and emerging technology (McCusker 2006). Intensification of the reliance on information technology systems to manipulate crucial infrastructure has made these ICT systems and the state’s reliance on their efficiency, highly susceptible to the outcomes of any possible illegal break in the required structure or arrangement. Above all, the broader distribution and accessibility of technology has allowed criminals to more effortlessly commit fraud and related activities (McCusker 2006; McQuade 2006). As early as 1998, the potential for the Internet to accelerate cybercrime was highlighted by the then US President, Bill Clinton, who noted that: …rapidly advancing technology, including the Internet, now make it possible to commit a crime at any point on earth from anywhere in the world without ever physically entering the jurisdiction where the crime is committed. Thus a hacking incident, financial fraud or theft can take place entirely through the Internet with the suspect never leaving his or her home (As quoted in Goodman 2011, 315).

Though the emergence of the Internet has created a network for governments and societies to enhance their society, conversely, it has also served as the biggest impetus for the execution of cybercrimes providing criminals with the option to expand their reach. M. Goodman (2011, 313) explained that ‘more powerful communications, increasingly…give criminals the opportunity to reach across borders physically and electronically to commit crimes and then retreat before they can be caught and punished.’ In the past, the use of computers to commit crimes was confined to specific borders or was limited to network areas. It can be

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asserted therefore, that the Internet provides international reach for cybercrime perpetrators, as it allows information to transcend border barriers. What is worse, is that when these crimes are committed, the offender cannot be held accountable due to the fact that s/he does not reside in the country where the crime was committed (Goodman 2011). Goodman’s sentiments were buttressed by the findings of research carried out by Internet security company, MacAfee. The McAfee (2010) report highlighted the fact that beginning with a reasonable progression in the 1990s, cybercrimes started to expand almost directly in alignment with the surge in Internet usage. Close to half a million users in year 2000 eventually jumped to two billion in 2010, which also saw the advent of the Internet evolving and diversifying into more advanced technology while paving the way for a wider array of income earning prospects. During this period, the Internet established itself as a prosperous arena for garnering information as well as making money; two things which criminals could capitalize on (Schell and Martin 2004). It was not long before cybercriminals began to take advantage of the ease with which people’s private financial information could be accessed for fraudulent purposes. On the heels of this occurrence and the accelerated evolution of the web, came social media pages, which provided yet another opportunity for criminals to practise identity theft (McAfee 2010).

THE EMERGENCE OF CYBERCRIME: WEAK INTERNET SECURITY AND THE FACILITATION OF CYBERCRIME The emergence of the Internet has proven to be a doubleedged sword as one of its major strengths – facilitating rapid and easy contact – has also turned out to be its major


drawback, thus resulting in additional complications in the fight against cybercrimes. R. McCusker (2006) explained that this critical resource (the Internet) we have come to rely on, despite its many benefits, was never guaranteed to be exempt from attempts to use it illegally and maliciously. Accordingly, cybercriminals and their associated groups carry out their illegal acts on the Internet governed by the same laws and restrictions as all individuals. This is also where the problem exists, as authorities are often constrained by geography and the lack of established legislation. Against this background, the chance that more individuals will fall prey to cybercrime across national boundaries is predicted to increase while the possibility of nabbing cybercriminals will decrease (Abrahams, 2010; McCusker, 2006). One particular transnational threat that has emerged fullblown within the era of globalization, is the illegal transfer of information. This is popularly referred to in the literature as Cybercrime. Cybercrime is considered as one of the fastest growing criminal activities, not to mention the threat it poses to the sovereignty of nation states (Sosa 2010). To date, cybercrimes rate highly on the list of some of the most rapidly evolving unlawful acts. Not only does it encompass the ambit of illicit fiscal swindling, but it also involves electronic hacking, viewing and copying of sexually obscene material via the web, as well as the creation of corrupting e-mail transferable software and racially discriminating websites (Sosa, 2010). The concept of cybercrime is constantly evolving. Though there appears to be universal acknowledgement of the term, a myriad of perceptions of what constitutes cybercrime still exists. This ambiguity becomes problematic as it affects every aspect of prevention and resolution. It is therefore imperative that the definitions of this concept be exhausted

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while exploring its evolutionary nature and its different categories.

CYBERCRIME AND ELECTRONIC BANKING Even though incidents of cybercrime may at times be exaggerated, one high profile incident is enough to send shockwaves worldwide as persons who hear of this, even in distant countries, will desist from using cyberspace for commercial transactions. Immediately, C.Hale’s (1996), fear of crime theory becomes applicable as it shows that where persons perceive themselves to be vulnerable, they will take steps to avoid such circumstances. This theory easily becomes relevant to the fear of cybercrime and electronic banking since it serves as a perfect rationale for persons who are reluctant to engage in cyber activities out of fear that they will become a victim overnight; so instead of experimenting with the idea, they form their own conclusion from what they have heard. Davis Wall (2008) explained that citizens who have been victimized or who have witnessed victimization will be reluctant to engage in similar activities. In the cyber world, as explained by Wall, there might not have been actual attacks where fear of cybercrime is concerned. More often than not, those who live in fear have not necessarily witnessed an actual act (Wall 2008). Instead, their fear is generated from the over reporting or exaggeration of cybercrime in the media. There are even instances where persons may not even know or understand what cybercrime is; they merely label it as bad as a result of the magnitude of negative reporting which it has received. In turn, this alleged over reporting spreads panic among the wider public who formulate a negative perception, which is converted to anxiety. This will most


likely be reflected in their behaviours; persons may refuse to obtain a credit card due to fear of identity theft, or refuse to shop online due to lack of trust in the websites, or fear that their credit cards will be stolen given the magnitude of the reports that surface in the media. For those who have been victims of cybercrime however, it is only natural that they may develop a fear based on their past experiences (Aseef, Davis, Mittal, Sedky and Tolba 2005).

The Nature of Cybercrime A major risk to electronic banking usage is identity theft. This form of cybercrime has many variants: phishing, pharming, hacking and evil twins (Gan, Ling, Yih and Eze 2008). Identity theft has been a long-standing problem; even before the Internet existed, persons would forge documents and assume the identity of others. The emergence of the Internet has further facilitated this malicious practice. To date, there has been growing concern among the banking industry due to the rapid rate at which identity theft has been spreading among its customers. Identity theft has been conceptualized as the malicious use of another person’s identity to purchase merchandise, obtain credit or other valuable things. Whereas this is done manually offline, online identity theft has been achieved through the use of computer viruses, spyware, Trojans, worms, key loggers, pharming and phishing (Gan et al. 2008). Electronic banking customers are primarily the targets of phishing attacks. These customers are normally sent unsuspecting emails luring them to a fake website which usually has the bank’s name or something that resembles the domain of financial institution that is being attacked. On these sites, customers are required to update their banking information by entering their user name and password or

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other banking information (Gan et al. 2008; Moore and Clayton 2007). To appease customers’ suspicion, in these emails, customers are reassured in the manner of: ‘Reminder: Chase will never ask for your PIN or password over the telephone, by text message or by e-mail.’1 This will have a reassuring effect as customers are normally encouraged by the fact that their banks are requesting that they submit information via a secured network rather than via an email. During phishing attacks, once the victims’ details are entered, their information is emailed to the fraudster; this information is either sold on the black market or the fraudster himself bail out the victim’s bank account (Moore and Clayton 2007). Pharming however, differs somewhat from phishing; rather than luring unsuspecting customers to a spoofed website via email, the ‘hacker acquires the Domain Name Server (DNS) or attacks users’ browsers to redirect users to a different IP address, where the fake or spoof web site is hosted, with an intention to get users’ personal details’ (3). Therefore, irrespective of the media’s sensationalism of the fear of crime and cybercrime included, those who are concerned with electronic crime have just cause to do so as there is enough evidence to suggest that this is a serious problem. This is so, as many Internet users have fallen prey to phishing and identity theft as some criminals use other persons’ credentials in order to access their credit accounts (Ohm 2008). For instance, in 2009, identity theft was identified as one of the fastest growing types of cybercrime in the United States. Reported cases of identity theft in America saw a 22 per cent increase between 2007 and 2008 which resulted in approximately 9.9 million reported cases of victimization (Finklea 2014). This vast increase in 1. See appendix 1


the level of cybercrime, particularly identity theft, has also impacted significantly on Americans. K. Finklea (2014) noted that identity theft is also used as a means to facilitate other secondary crimes such as credit card fraud which the Federal Trade Commission (FTC) reported costs victims $50 billion annually. Though doubts about the prevalence of cybercrime remain, reports of cybercrime have taken their toll on a growing number of victims. There is evidence to suggest that most individuals, who harbour concerns about cybercrime have never experienced victimization. However, awareness of other incidents of victimization causes disposition. A study conducted in Australia indicated that over 50 per cent of the 13,500 individuals who participated in the study expressed concerns about the possibility of identity theft despite the fact that less than two per cent had ever been victims (Ladson and Fraunholz 2005). It is interesting however, that when compared, the number of credit card losses occurring offline is significantly higher than losses that occur online. Notwithstanding, the unsanctioned use of personal information remains a significant threat. The concern about cybercrime is not only a threat to individuals, as businesses within the digital economy also face this risk. Offline bricks and mortar businesses are threatened by extortionists who make ransom demands for protection and threaten vandalism of the businesses. Such behaviour has since transferred from offline to online (Wada and Odulaja 2012). Denial of service attack is often used as a threat to extort money from online business. Online companies that refuse to cooperate are often the victims of repeated denial of service attacks, which refers to a malicious intent to shut down the server of an online business. Perpetrators first make a request for payment backed by

Cybercrime ¦ 57

the threat of service suspension if their demands are not met (Finklea 2014; Wada and Odulaja 2012). As a result, the system is unable to operate as intended (slow network performance), which leaves customers disappointed with the quality of services offered, or in extreme cases, customers will not be able to access the system at all. This may have a significant impact on the profitability of the bank’s electronic banking system, as customer activity will be reduced, especially in cases where it takes a significant amount of time to rectify the problem. Banks therefore are not exempt from the concerns or fear of cybercrime as the occurrence of cybercrimes can have a debilitating effect on the operation of banks as these attacks will invariably demand increased attention and financial resources to rectify the situation. In addition, the technical glitches will test the fortitude of the staff, stakeholders and customers. With reports of these forms of cybercrime being prevalent as well as indigenous to electronic banking, irrespective of whether or not they are valid, the fact remains that the legacy of electronic banking continues to suffer immensely. This fear of cybercrime threatens to destabilize the growth of electronic banking since the perception of the Internet as unsafe has persistently deterred customers. Even where these perceptions are false and have no empirical basis, rumours have resulted in customers becoming reluctant to engage in e-commerce or Internet banking for fear that their accounts will be hacked or that they will become victims of identity theft and phishing (Gan et al. 2008). This has become rather challenging since banks rely on customer loyalty, trust and confidence in their institutions which is equally true for electronic banking. This trust factor has become a key determinant in customers shifting from traditional to Internet banking. Where customers do not


trust the Internet banking system, this automatically affects their confidence. This may incite customers to take coercive actions and avoid places where they do not feel comfortable (Lichtenstein and Williamson 2006; Monsuwé, Dellaert and Ruyter 2004). Internet banking offers a wide range of benefits for its customers, most of which are offered at the customers’ convenience, thus minimizing the need to visit the physical branches. Despite the increased efficiency, convenience and cost reduction that Internet banking provides, it remains that not all customers are readily gravitating towards its use as previously anticipated. One of the many factors that has led to this is that customers do not trust conducting banking transactions online (Kuo 2010; Sudhahar and Karthikeyan 2010). Trust ‘indicates a positive belief about the perceived reliability of, dependability of and confidence in a person, object or process’ (Sudhahar and Karthikeyan 2010, 1). Numerous studies have shown that acceptance and use of electronic banking system is heavily dependent on trust in the system. Lack of trust is, however, attributed to poor security and privacy settings of electronic banking forums which was found to be the case in Australia, Vietnam and Singapore (Lichtenstein and Williamson 2006). Trust, or the lack thereof, is predicated on customers’ perception that the transfer of funds, updating of accounts, bill payments and shopping are valuable assets worthy of being protected. Therefore, where they do not perceive the systems put in place to ensure and maintain such confidence as being secured or trustworthy, they will become cautious and refrain from using the system ( Jaruwachirathanakul and Fink 2005). As it stands, only a few remain confident in conducting banking transactions online, while the lack of trust emerges as a deterrent factor among the majority (Sudhahar and Karthikeyan 2010).

Cybercrime ¦ 59

Therefore, regardless of the conveniences that are to be found in the use of electronic banking, customers are nevertheless fearful of the practice due to mistrust of online security systems, which stems from the fear of cybercrime. In any business relationship, consumer confidence is of the utmost importance and this confidence will only be achieved if potential customers are certain of the bank’s ability to protect information about its online transactions from nefarious persons (Lichtenstein and Williamson 2006). This confidence, if not assured, will lead to customers being reluctant to make use of the facilities at their fingertips and may result in banks losing a significant portion of their revenue base. This has been the case in Australia, where over a million persons abstained from purchasing goods online due to security concerns (Lichtenstein and Williamson 2006). Undoubtedly, this fear of cybercrime will have repercussions, not only for the sectors that rely on the Internet for client transactions, but also for all the stakeholders in the banking industry who all stand to lose significantly from the revenue shortfall that will result from the loss of business (Sudhahar and Karthikeyan 2010). When persons are faced with unusual and innovative situations, they have no alternative but to depend on their generalized temperament to trust (Monsuwe et al. 2004). With the relatively recent introduction of this form of electronic commerce through the use of this ‘new media’, the resulting dearth of experience has posed some challenges for consumers. The salesperson is considered as the most prominent cradle of trust in one’s shopping experience as the customer service delivered impacts significantly on one’s level of trust. In online shopping, however, the sense of trust that is fostered by the corporeal presence of a sales attendant is absent from the experience thereby forcing customers to


rely on innovative technologically-driven support. This lack of familiarity with this new form of commerce (e-commerce) may make consumers more apprehensive about engaging in the process. The associated risks of online shopping also heighten consumers’ apprehension as the customer is essentially incapable of actually inspecting the quality of the merchandise or ensuring that the information provided during this experience will remain confidential. Therefore, the consumer is sometimes reduced to a state of impotence against the technological might of the Internet (Alsajjan and Dennis 2006; Monsuwé et al. 2004). Trust, therefore has a regulatory effect as it relates to the association between a consumer’s disposition towards online shopping and whether or not they intend to engage in the practice. Hence, it can be established that trust is one of the overriding and dominant features that undergirds one’s decision to engage in shopping via the Internet. Marked by a sense of intricacy, the analysis of consumer trust with regard to online shopping and what influences the choice to engage in such a process extends the boundaries of trust to include both interpersonal and institutional trust. Therefore, trust between the customer and the website offering the goods and services is as important as trust between the customer and the Internet in and of itself. Understandably, there is a positive association between increased consumer trust, as evidenced by a more favourable attitude towards electronic commerce and a high sense of security and confidentiality during the exchange of information over the Internet. Alternatively, when that trust is violated through the inappropriate and unsanctioned viewing and use of private information, consumers become averse to engaging in shopping on the Internet in the future (Dennis and Alsajjan 2006; Monsuwe et al. 2004).

Cybercrime ¦ 61

Cybercrime therefore, causes a reaction of fear in humans as it is recognized as posing a potential danger – real or imagined. Conceptualized by those associated with it, either from being a victim or from hearing about it, cybercrime is subjective by nature (Wada and Odulaja 2012). The perception of the threat of cybercrime varies depending on the characteristics of the individual. Wildavsky and Drake (1990) explained that ‘…the most widely held theory of risk perception…the knowledge theory [explores] the often implicit notion that people perceive technologies to be dangerous because they know them to be dangerous’ (166). Knowledge here, refers not to intellectual knowledge but to the familiarity of the individual with the technology in question. As such, in cases where persons have a solid knowledge base on the technology itself, then the perception of fear is considerably lower. In Australia for example, a survey found that those who were technical experts had higher levels of confidence in security than those who did not. Those with a high knowledge base of computer technology indicated they that they were aware of the threat of cybercrime and rather than retreat in fear they employed the use of antivirus software among other strong security measures (Wildavsky and Drake 1990). Risk perception can be innately triggered by signs ranging from the sound of footsteps in a dark alley, to shadows outside one’s window. However, there are instances in which signs that are designed to reduce fear are cognitively reversed by human beings thus having the opposite effect. For instance, underground car parks often reserve the front row for female drivers. Upon entering and being greeted by ‘reserved for women’, rather than having a reassuring effect on women who are uncomfortable parking in an underground park, the opposite is achieved. Women who may not have normally perceived underground parks as dangerous, are


immediately alerted to the fact that underground lots can be dangerous (Gabriel and Greve 2003). This is tantamount to what takes place in the case of cybercrime. Though there are existing anti-virus software that allow data encryption which is designed to protect against identity theft, instead of having a reassuring effect on those who fear electronic banking, this often times has the opposite effect on clients. The anticipated feeling of assurance can be easily replaced by anxiety based on the existence of a security system. This system does in fact signify that there is danger; in other words, the system that was designed to allay fear is indeed causing fear, which consequently contributes to an increase in the level of perceived risk. Possession of wealth was also identified as another characteristic inversely associated with perception of risk and fear. Among the rich, risk perception of technology was found to be very low. This was based on the rationale that ‘the rich are more willing to take risks stemming from technology because they benefit more and are shielded from adverse consequences’ (Wildavsky and Drake 1990, 166). Though this rationale was used in relation to technology in general, by extension, it could be used to substantiate the claim that in present circumstances, the perception of fear of cybercrime would be minimal or where the fear is high, wealthy customers will more than likely forgo the perceived risk as well fear of cybercrime to benefit from the convenience of e-banking. This assumption is formed based on Wildavsky and Drake’s reasoning since the rich in the case of cybercrime might be able to withstand the impact of being a victim.

Cybercrime ¦ 63

CONCLUSION Despite the associated risk, the fear of cybercrime continues to be dependent on the need for Internet banking. Where the desire for the benefits of Internet banking (such as increased convenience, efficiency and relative cheapness) continues to increase, then the level of fear will decrease. In societies that are technologically driven, customers will therefore become bolder and more confident as they develop the courage to risk electronic banking despite having security concerns or the perception that will become victims of identity theft or phishing. Though they may accept the risks, the existing fear of cybercrime forces them to take the necessary precautionary measures such as equipping themselves with the latest antivirus software or extra security measures. AcNeilson (2005) noted that participants often take Internet-based considerations into account when making banking choices. Australian banking consumers however, have adjusted to the presence of these Internet-based risks and are quite prepared to accept them. In fact, they believe that the conveniences of online banking far outweigh the risks. Nonetheless, ‘many users mentioned taking their own steps to check loss of data integrity by regularly checking balances and transactions, maintaining low amounts in online accounts and printing out receipts and other evidence’ (Lichtenstein and Williamson 2006).

Fear of Cybercrime as a Challenge to Global Electronic Banking FEAR OF CYBERCRIME VICTIMIZATION AS A DETERRENT TO ELECTRONIC BANKING In this section, we examine electronic banking in two Caribbean countries – Barbados and Jamaica. Overall, the study indicated low use of electronic banking especially when compared to countries such as the United States, United Kingdom, Estonia and Singapore. Based on the low usage it can be inferred that electronic banking is an emerging segment within the two countries examined. In the case of Barbados, only 12 per cent of the sampled respondents were using electronic banking, whereas it was 36 per cent in Jamaica. This is indicated in figure 4.1 below. Figure 4.1: Use of Electronic Banking

Barbados; Non-Use; 88%

Jamaica; Non-Use; 64% Barbados Jamaica; Use; 36% Barbados; Use; 12%

Jamaica

Fear of Cybercrime as a Challenge to Global Electronic Banking ¦ 65

Figure 4.2: Purpose of using Electronic Banking

Jamaica; Check account balance; 35%

Barbados; Check account balance; 38% Jamaica; Transfer money; 34% Barbados; Transfer money; 35% Jamaica; Pay bills; 31% Barbados; Pay bills; 27% Jamaica

Barbados

Those who utilized the online system mostly used the services to check account balances, followed by money transfer and bill payment. In both countries, the retarded use of electronic banking can be attributed to an overwhelming preference for face to face banking and a fear of cybercrime. To a lesser extent, some customers said they did not know how to use the online system, while more than a quarter of them (27 per cent) had never heard of it. While some customers remained drawn to the features of electronic banking, others ignored its convenience, cheapness and efficiency, because they preferred direct interpersonal relationships (Chong, Ooi, Lin and Tan 2010). In other studies, customers indicated that they did not use electronic banking for a number of reasons; one of the most predominant reasons was the fact that they preferred the traditional means of banking, conducting face to face transactions. Within the Jamaican context, banking


customers also identified face to face as their preferred medium for banking ( Jaruwachirathanakul and Fink 2005; Lichtenstein and Williamson 2006; Wada and Odulaja 2012). By extension, their preference also rationalized their attitude of reluctance towards electronic banking. This finding remotely serves as evidence that Jamaican’s low usage of electronic banking is not primarily due to fear of cybercrime. The results in figure 4.3 provide an overview of the varying reasons customers are disinclined to use electronic banking. In both instances, fear of cybercrime is identified as one of the major factors. The preference for face to face banking in both countries is well established in the literature. Several studies ( Jaruwachirathanakul and Fink 2005; Lichtenstein and Williamson, 2006; Wada and Odulaja, 2012), particularly in developing countries, have identified face to face banking as the public’s preferred mode of carrying out transactions. For example, a study of the banking landscape in Kenya revealed that customers prefer the personal human interaction, as opposed to interacting with a machine. Figure 4.3: Reasons for not using Electronic Banking

Jamaica Barbados


During qualitative interviews, customers emphasized the importance of having a personal conversation, meeting the manager or having a brief conversation and coffee with the bank’s manager.

PARAMETERS OF THE FEAR OF CYBERCRIME IN JAMAICA AND BARBADOS No previous study in the Caribbean has made an attempt to measure the fear of cybercrime. For this reason, the fear of cybercrime scale was modelled off previous fear of crime studies. The new scale was therefore developed specifically for this study. This scale consisted of nine questions measured on a Likert Scale. The same scale was administered in both countries. For Jamaica and Barbados, the scale obtained a Cronbach’s Alpha score of .75 and .831 respectively, thus signifying high levels of internal consistency in both countries. The items on the scale were as follows: • I am afraid of using my credit card at a store here in this country? • I am afraid of using my credit card at a store in the USA or the UK? • I am afraid to give my credit card information over the phone to someone in a Caribbean country (for business)? • I am afraid of using my credit card at a store in another Caribbean country? • I am afraid to give my credit card information over the phone to someone in this country (for business)? • I am afraid to give my credit card information over the phone to someone in the USA or UK (for business)? • I am afraid of using my credit card to buy or pay for something on a local website (A website in this country)?


• I am afraid of using my credit card to buy or pay for something on a website of another Caribbean country? • I am afraid of using my credit card to buy or pay for something on a US or UK website?

Jamaica A summary analysis was used to provide the mean response to the nine items. The nine items generated a scale mean of 2.27 indicating that overall, respondents who answered these questions (N=215) were in agreement with all nine items. When disaggregated, it was observed that the level of fear among credit cardholders varied depending on whether they had to use their cards at a store, over the phone or on a website and the space of the transaction. Customers were least fearful to use their credit card at a store in Jamaica; this was followed by the USA and UK. Next in line was the provision of credit card information over the phone. In all three instances (locally, regionally and overseas), respondents expressed that they were not afraid to provide their credit card information. However, customers became immediately fearful when the context was switched from store and telephone. They merely disagreed that they were not afraid to use their credit card on a website in Jamaica (M=1.32, SD=0.58). Customers, nonetheless agreed that they were afraid to use their credit card on a website in another Caribbean country (M=1.45, SD=0.66). Customers also indicated that they were most fearful of using their credit card on a website in the UK or United States. These findings are represented in table 4.1 below. From the analysis ‘human interaction’ proved pivotal in customers using their credit cards. In the first instance, they clearly express a preference for face to face in store interaction; this is followed by provision of the information


over the telephone. However, where the website is concerned, fear quickly develops in the absence of a human being. Table 4.1: Fear and the Use of Credit Cards Offline and Online

Fear and the use of credit cards offline Jamaica Barbados and online (N215) (N202) I am afraid of using my credit card at a store here in this country?

2.884

2.140

I am afraid of using my credit card at a store in the USA or the UK?

2.750

1.861

I am afraid to give my credit card information over the phone to someone in a Caribbean country (for business)?

2.750

1.689

I am afraid of using my credit card at a store in another Caribbean country?

2.736

1.673

I am afraid to give my credit card information over the phone to someone in this country (for business)?

2.732

2.178

I am afraid to give my credit card information over the phone to someone in the USA or UK (for business)?

2.713

2.272

I am afraid of using my credit card to buy or pay for something on a local website (a website in this country)?

1.322

2.124

I am afraid of using my credit card to buy or pay for something on a website of another Caribbean country?

1.445

2.188

I am afraid of using my credit card to buy or pay for something on a US or UK website?

1.112

1.733

Note: N = 9. Scale interpretation ranges for the scale means: 1 = Strongly Agree (1.00-1.49), 2 = Agree (1.50-2.49), 3. Disagree (2.50-3.49), 4 = Strongly Disagree (3.50-4.00). Scale M = 2.27 (SD =.24). CRONBACH ALPHA=.750


Barbados In this instance, when presented with scenarios in which they would use their credit cards, the respondents who answered these questions in Barbados (N=202) agreed in every instance that they were afraid to use their credit cards (1.98). Barbadians’ level of fear is more intense towards using their credit card to buy something on a website in another Caribbean country (M=1.67, SD=0.83); use at a store in another Caribbean country (M=1.69, SD=0.78); buying or paying for something on a US or UK website (M=1.73, SD=0.92); afraid of using my credit card at a store in the USA or the UK (M=1.86, SD=0.81). Though fearful in all circumstances, Barbadians were less inclined to use their credit card on a local website (M=2.12, SD=0.83); or at a local store (M=2.14, SD=0.80); providing card information over the phone to someone in Barbados (M=2.18, SD=0.92); providing card information over the phone to someone in another Caribbean country (M=2.18, SD=0.80); provide information over the phone to someone in the USA or UK (M=2.27, SD=0.85). Overall, credit cardholders in Barbados were very apprehensive towards using their credit card, irrespective of the setting. Though this is the case, their fear appears to be more intense in some context when compared to others. For instance, the provision of credit card information over the phone triggered fear among cardholders at a lesser intensity. Credit cardholders demonstrate an increased propensity to fear when they are required to use their credit card in another Caribbean country or on a website (local, regional or in the US/UK). Similar to cardholders in Jamaica, there is a preference for human interaction. However, it remains unique how credit cardholders are fearful in every setting. This is articulated in table 4.2.


Table 4.2: Factors Influencing Fear of Cybercrime Victimization

Items Risk perception Electronic banking Age Income Trust Education Gender Victimization Geographical location Confidence

Barbados 7.76* 4.94* 2.73* 2.28* 2.18* 1.61 1.04 1 0.64

Jamaica 5.22* 1.03 0.56 2.40* 0.642

0.53

0.35

0.2 1.65 0.44

*Values over 1.96 are significant at the .05 level for this model

RISK PERCEPTION AND FEAR OF CYBERCRIME VICTIMIZATION On identifying that fear of cybercrime can now be included in the discussion pertaining to factors contributing to why citizens resist electronic banking; we explored the influencers of fear. Table 4.2 depicts these influences. Based on the data analysed in both countries, it was observed that risk perception significantly influenced ‘fear of cybercrime’. ‘Risk Perception’ can be said to fuel the fear of e-banking cybercrime victimization. Risk perception refers to the possibility of an unwanted event occurring and the individual’s concern with the impending effects. Risk perception is subjective in nature as the possibility of an unwanted event occurring is measured from the vantage point of the individual. Therefore, the individual’s estimation of his or her vulnerability may be


on point or exaggerated. For this study, the variable risk perception was measured using three factors; credit card account, credit card information and debit card account. Respondents were asked to indicate whether they believed that someone could steal money from their account, credit, or debit card. The available responses to each question were; yes or no. Each time respondents selected ‘no’ to one of the three questions they were given a score of zero; each ‘yes’ answer received a score of 1. Responses to the three questions were computed; a score of zero indicated ‘no threat’; 1 ‘low’; 2 ‘moderate’ and 3 ‘high’. Based on the data analysed, approximately 75 per cent of the Jamaican respondents were of the view that their account and both their credit and debit card information, can be compromised; while only four per cent were of the view that cybercrime did not pose a threat to their bank account. This is represented in figure 4.4. More than half (55 per cent) of the Barbadian respondents were of the view that there is a high possibility of their account being compromised, compared to 9.4 per cent who did not perceive cybercrime as a threat. Of significance, was the huge disparity between respondents who perceived cybercrime as a threat and those who did not. There was a 69 per cent difference in the case of Jamaica and 47 per cent in the case of Barbados. The immense disparity between the groups in both countries served to reinforce that risk perception is relative to selfefficacy. Based on the findings, there is evidence to suggest that there is a linear relationship between risk perception and self-efficacy in Jamaica. Very few respondents demonstrated a high self-efficacy by indicating that they did not perceive cybercrime as a threat, whereas those with a high risk perception demonstrated low levels of self-efficacy.


Figure 4.4: Risk Perception of Online Banking 73%

Per cent

55% Barbados Jamaica

30.50%

5.10%

16%

9.40%

4%

7%

Figure 4.5: Risk Perception of Online Banking: Online vs. Offline Users in JAMAICA Non-User; Low; 72%

Non-User; No risk; 64%

Non-User; Moderate; 68% Non-User; High; 60%

User; No risk; 36%

User; Moderate; 32%

User; Low; 28%

Non-user

User; High; 40%

User

Figure 4.6: Risk Perception of Online Banking: Online vs. Offline Users in BARBADOS Non-User; No risk; 100.00%

Non-User; Low risk; 100.00%

Non-User; Moderate risk; 83.30%

Non-User; High risk; 80.70%

Non-user User

User; No risk; 0.00%

User; Low risk; 00.00%

User; Moderate risk; 16.70%

User; High risk; 19.30%


Due to the subjective nature of risk perception, it will always be exaggerated. Not surprisingly, the difference between those who perceived risk and those who did not remains huge. The possibility exists that although perception of risk is high, this may be so in the absence of actual incidents of cybercrime in Barbados and Jamaica, especially in light of very few reports of customer accounts being compromised. It remains that risk perception is formed cognitively; therefore, the actual event perceived as threatening does not have to occur in order to trigger a response. (Perception of the threat of cybercrime in this instance should not be confused with fear of cybercrime, as established in the conceptual framework.) These findings are in keeping with research that has found the link between perceived risk and the actual risk of victimization to be weak. Fear of crime has commonly been reported to be most acute among those groups that are least likely to be victimized. W. Skogan and M. Maxfield (1981) and R. Kinsey (1984) for example, reported that among their research population, anxiety about crime was highest among persons above the age of 50. This was despite the fact that official statistics showed the greatest risk to be to those under the age of 30. This incongruence between fear of crime and actual rates of victimization was a feature of early work in the field with opinion polls consistently demonstrating high levels of fear existing within both communities beset by high rates of crime as well as those suffering from minimal occurrences (Furstenburg 1971; The President’s Commission on Law Enforcement and Administration of Justice 1967). Contemporary studies have continued to reveal this paradox (Killias and Clerici 2000; Smith and Torstensson 1997). Data from the Caribbean too suggests a similar trend. A Trinidadian study conducted by D. Chadee et al. 2007, demonstrated that the level of fear


reported by respondents was disproportionate (particularly for murder) to national crime statistics (Wynne 2008).

RISK PERCEPTION AS A DETERRENT TO ELECTRONIC BANKING A bivariate analysis was used to compare perception of fear among non-users and users of electronic banking. The findings suggest that there is a huge disparity in perception of risk among non-users and users of electronic banking; among non-users, risk perception is noticeably higher. This is expected, as even though users engage in doing their banking online, they may still perceive it as risky. This perceived risk is not proportionate to that of non-users. Although users harbour some amount of fear, this fear may be abated by the fact that they are compelled to use electronic banking. The obligation to use electronic banking may have arisen out of convenience, for example, an urgent need for efficiency, especially for persons who live a fastpaced lifestyle. Another reason online users’ risk perception is lower, may result from how they use the online banking system. While using it, they do so simultaneously with precautionary security, buttressed by confidence in their banks to offer protection and adhere to stipulated safety measures. What is the cause of this risk perception? Further analysis was undertaken to answer this question. Based on the data analysed, it was discovered that the media significantly contributes to influencing the perception that there is a high risk of cybercrime victimization associated with conducting electronic banking. This is presented in table 4.3 and further explored in the next chapter.


Table 4.3: How the Media Influences Risk Perception

Item Trust Confidence Risk perception Education

Barbados (Media) Jamaica (Media) 1.912 1.644 9.15 1.67

2.24 2.67 10.88 5.817

*Values over 1.96 are significant at the .05 level for this model.

The Media, Risk Perception and Fear of Cybercrime MEDIA SENSATIONALISM OF CYBERCRIME The media has been recognized globally as an agent of socialization (Clausen 1968; Hurrelmann 2009; McQuail 2005). The media, whether television, radio, print media, or new digital media, influences the behaviour, values, beliefs, ideologies, views of the world, attitudes, expectations and truths of a society (Gerbner and Gross 1976). Its ever increasing presence and multiplicity of forms explains the pervasiveness of this agent of socialization. The media, and in particular television, readily sensationalizes the online space, providing a distorted hyper-reality about cybercrime, which easily affects the viewer’s fear of cybercrime in the same way it has affected general fear of crime. Similarly, heavy exposure to the media, especially crime-saturated news, has fuelled widespread fear of crime in many parts of the world. It is arguable that this fear of cybercrime observed in the data collected, is as a result of the way in which cyber related activities associated with electronic banking have been represented since the 1980s in the media. In 1983 for example, the feature film, The War Games introduced the first computer hacker. This movie portrayed a high school computer hacker who had the capability to infiltrate military databases. The War Games paved the way for a number of second generation science fiction motives such as The Net (1995), Hackers (1995), Swordfish (2001), and Anti-Thrust (2001), all of which portrayed computer hackers as super humans capable of shutting down the universe.


Added to this, the ability to commit crimes on the Internet was mushroomed by other components of the print and electronic media. This has led to the demonization of computer and Internet related crimes. On the world news, incidents of cybercrime are frequently reported1 and sensationalized, including incidents of hacking and identity theft. Incidents of cybercrime are also highlighted in movies produced in the reported territories. Consequently, it is not surprising that international media reports serve as the primary source of information on cybercrime for many individuals.2 Several multinational companies have also fallen victim to cybercrime. These include: Apple,3 Sony, LUSH and several private banks.4 Even though banks account for few of the victims, the compromising of the database of these large scale entities is sufficient to send shock waves around the world. These shock waves are filtered down to viewers whose perception is shaped by these incidents. Upon being constantly bombarded, they develop a negative view of cybercrime to the extent where it is perceived as a threat. The media feeds off the vulnerability of the public’s ignorance of cybercrime. Rather than objectively relaying or balancing the probabilities, the media paints a gruesome picture of a reality in its embryonic stage. Regardless of the fact that the conviction rate does not match the magnitude 1.

2. 3. 4.

In 2008 Sony admitted that the data for millions of customers have been compromised. http://www.dailymail.co.uk/sciencetech/ article-1381000/Playstation-Network-hacked-Sony-admits-hackersstolen-77m-users-credit-card-details.html http://www.wired.com/threatlevel/2012/11/bank-to-pay-hackingvictim/ http://pctechmag.com/2013/02/apple-admits-being-a-victim-tohackers/ http://dkmatai.tumblr.com/post/37277877990/sophisticated-smartphone-hacking-36-million-euros

The Media, Risk Perception and Fear of Cybercrime ¦ 79

at which cybercrime is being reported, it remains that cybercrime has the potential to cause moral panic. Contrary to those perspectives which advocate that direct experience has the greatest effect on levels of fear, considerable evidence exists to support the notion that it is indeed indirect sources such as the news that account primarily for an individual’s concern about crime (Covington and Taylor 1991; Lane and Meeker 2003). With its continuously increasing modes of transmission, the media is one of the main channels through which knowledge of crime is obtained. It is through this medium that individuals often learn of the occurrence of crime, both at the local and national levels. Studies conducted in the United States have demonstrated that television news reports are most likely to begin with a story about crime and that as many as one-third of all news stories are about crime (Angotti 1997; Beale 2006). Similarly, television viewers in Jamaica are constantly bombarded by stories of violence on the news. These reports are normally accompanied by graphic videos and traumatized eyewitnesses and relatives (Bailey 2006). Although research generally suggests that television viewing has the greatest media impact on fear (Weitzer and Kubrin 2004), other mediums such as newspaper (Heath and Gilbert 1996; Williams and Dickenson 1993), and the Internet (Flanagin and Metzger 2000; Rainie 2010) have also been shown to play important roles as well. Fear of crime therefore is heavily influenced by the media, which plays ‘…an important role in the shaping of one’s perceptions of risks. Most people garner information through the media rather than through experience, their perception is molded by the way the information is communicated’ (Furedi 2006, 59).


Research on the relationship between the media and fear of crime is characterized by the work of George Gerbner (1988) and colleagues, particularly in relation to their work on cultivation theory. They argued that the mass media produced and transmitted messages that reflected the biases and agendas of those that transmitted them. These messages dominate social communication until the public’s world view is more in keeping with that of the media institution, than with reality. Frequent exposure to crime in the news therefore, can lead people to exaggerate the likelihood of becoming a victim of crime (Grabosky 1995). Proponents believe that the media erroneously portrays the world as crime ridden, particularly through reports, which appear on television. Through the decades, mass media has constructed an image of a dangerous, evil world, rather than one in which people are safe. Over time, this has been absorbed by the general public, such that, it has become their own view (Gerbner and Gross 1976; Gerbner, 1970). The overall content of heavy viewers of television for example, consists of a disproportionately more distorted level of content than that of lighter viewers. As such, heavy viewers therefore tend to have a considerably more distorted view of the world. Based on such circumstances, substitution theorists argue that the media increases levels of fear among those with no history of criminal victimization (Weitzer and Kubrin 2004). According to the substitution theory, heavy exposure to crime within the media affects those with no direct exposure to crime, as these portrayals become a surrogate for actual experiences (Weitzer and Kubrin 2004). Those that are sheltered from crime therefore (e.g., the elderly, the affluent, those living in low crime communities) are believed to be at the greatest risk of increased fear due to media messages (Kohm, Waid-Lindberg, Weinrath, Shelley and Dobbs 2012).


Very few studies have tested this perspective empirically, though some support does exist within the literature (Chiricos, Eschholz and Gertz 1997; Weaver and Wakshalg 1986). The propensity for the media to emphasize crime and disorder has been linked to a variety of factors including, newsworthiness, capitalist structures and organizational pressures (Callanan 2012). Capitalism dictates that media organizations must be profitable, and towards that end, stories must fit certain criteria that make them interesting to the public. These include drama, vulnerability and simplicity, all of which are met by stories about crime (Morgan and Shanahan 2010). In direct contrast to the substitution theory, the resonance perspective argues that media coverage will increase fear among those individuals who recognize that reports are in keeping with their own experience with crime (Weitzer and Kubrin 2004). The theory suggests that when media images are consistent with actual individual experiences (e.g., living in a high crime community, criminal victimization), they serve to reinforce feelings of fear. Crime on television or radio for example, will have special significance among those living in high crime communities, since residents can relate to their local experiences of crime (Eschholz 1997). Limited support for this perspective exists in the form of a few studies such as that of A. Doob and G. McDonald (1979) who found that television watching increased fear among those in high crime communities, while having no effect among those living in areas characterized by low levels of crime. More recently, researchers have argued that the fundamental issue is the significant gap that exists between the frequency of crime as represented by the media and the actual number


of crimes that occur. Research has recurrently proven that the media exaggerates the magnitude of the existing threat; thereby generating fear amongst readers and viewers (Box et al. 1988; Furedi 2006). Using the example of Jamaica, C. Bailey (2006) argued that the nature of urban violence meant that people across the full range of social backgrounds were constantly bombarded by stories of violence on the news. These reports are normally accompanied by graphic videos and traumatized eyewitnesses and relatives. Various studies have examined the association between such media reports and the imparting effects it has had on its audience (Furedi 2006; Reiner 2002; Romer, Hall Jamieson and Aday 2003). Analysis of the results revealed that statistics quoted by the media remain disproportionate to actual crimes committed. In particular, one study conducted a number of content analyses on news reports published between 1965 and 1987 in 15 different countries: These all found an over-representation of violent and interpersonal crime, compared to official statistics, and an under-reporting of property offences. In America ‘the ratio of violent-to-property crime stories appearing in the surveyed newspapers was 8 to 2; however, official statistics reflected a property- to- violent crime ratio of more than 9 to 1 during the survey period. A similar pattern [was also] found in the content analyses reviewed for other countries (Reiner 2002, 8). Therefore, the disparity between cybercrime statistics and actual crime in media reports has created a moral panic within many societies, resulting in a general lack of trust and confidence in banks generally and online banking generally. Subsequently, this heightened anxiety within society has blossomed into a culture of fear. This in turn causes persons to react in panic and contrive various ways of coping. Stan Cohen first used the term, ‘moral panic’ in the 1970s to


describe the negative repercussions of exaggerated media reports on crime. The concept has since gained significant attention, which has caused the term to be consistently on the lips of academics. Subsequent to the popularization of the term, the media latched onto the concept and has used it as a reference to any form of eremitic and/or criminal conduct, often sensationalizing media reports. Therefore, it may be gathered that exaggeration, sensationalism and amplification are all concepts, which underpin moral panic. Hence, it can be ascertained that moral panic essentially refers to overstated responses from various sectors in society, particularly the media and the police, to the actions of different subgroups. These acts, in and of themselves may in fact be inconsequential; however, the significant amount of attention given by the media magnifies the actions of these individuals, causing concern and anxiety, which is then elevated to a state of ‘moral panic’ (Heath and Petraitis 1987; Marsh and Melville 2011). It is clear from this present project that the evolution of cybercrime is concurrent with the evolution of information technologies. Cybercrime owes its prominence to overwhelming media sensationalism, so much so, that to date, many consider it to be in the same realm as violent crime. Recently, the predisposition that the threat of cybercrime thrives on sensationalism is beginning to lose popularity, as there is now evidence to substantiate the existence of cybercrime, not only as a phenomenon, but also as a formidable threat. Because of the disturbing nature of reported acts of victimization, cybercrime has transformed from merely being perceived as a threat, to being considered a reality. The banking industry, most of all, has had to face cybercrime as a perpetual threat and has been victimized in the past.


CONCLUSION The explored literature recounts that the genesis of cybercrime is rooted in the electronic and print media, which were primarily responsible for sensationalizing the issue in the public sphere. Likewise for crime, the media is blamed for shocking the public’s consciousness by exaggerating the current state of crime in society. Often, there is little to no commensurability between what is reported and what exists as the reality is that cybercrime is an illusionary concept. This emanates from the fact that very little is known about actual instances of cybercrime. Thus, it is difficult to conceptualize and operationalize cybercrime proper. In his work, D.S. Wall (2008) drew attention to the exaggeration of this concept through a deconstruction of its philosophical underpinning. He noted that the concept of cybercrime, when examined critically, ‘like cyberspace, [is] riddled with epistemological disparities between “what is” and “what ought”’; therefore making it difficult to understand.

Conclusions

This research project extended the dialogue regarding the reasons that consumers do not engage in electronic banking to include ‘fear of cybercrime’. We have used the ‘fear of crime’ body of work to do so. The findings from this study do indeed indicate that fear of cybercrime is a factor, which deters consumers from doing electronic banking. It was observed that ‘risk perception’ significantly influenced fear of cybercrime victimization while conducting e-banking transactions, and that the media contributes to influencing the perception that there is a high risk of cybercrime victimization associated with conducting electronic banking transactions. Since its inception, electronic banking has been on the rise because of its increased efficiency and convenience. It is arguable that it has not developed to its full potential because the transfer of crime from society to cyberspace has fuelled the fear of cybercrime phenomenon, which has been heavily galvanized by the media. The media therefore plays an integral role in shaping perceptions and attitudes toward electronic banking as their portrayal of electronic banking and their constant fixation on the negatives fuels the fear of cybercrime. This has, in turn, created a moral panic in many countries, which continues to threaten the civic fabric of global societies. Therefore, despite attracting scores of customers, a significant number of bank users remain reluctant to engage in electronic banking as the majority have succumbed to their fear of cybercrime.


The general consensus however, is that the fear of cybercrime is still a deterrent for the majority. There is a lack of trust and a loss of confidence in the safety and security of the technological advancements in the banking system among a significant number of prospective users. This has resulted in a decline in profits and stunted growth within the digital economy as both customers and investors alike are hesitant to engage in a market that is plagued by malicious threats, financial loss and uncertainty. The fear of cybercrime also takes an emotional toll on victims as they may experience feelings of mistrust, panic, distress and frustration, which may impact on their health leaving them depressed and irritable. There may also be some reluctance to engage in electronic banking, again, as the experience of victimization may heighten fears of cybercrime. Therefore, banks will not only have to worry about attracting new customers, but also importantly, they will have to contend with maintaining the trust, confidence and loyalty of persons who have experienced victimization.

BUILDING TRUST We have already established the role played by trust in affecting levels of fear. Trust can have the effect of lowering perceptions of threat. As M. Marsman (2007) noted however, there are important differences in the roles that different actors play in affecting risk perception. It is critical therefore to identify the actors that are of greatest significance within the particular context of risk. R. Bursik and H. Grasmick (1993), building on the ideas of A. Hunter and T. Baumer (1982), stressed the importance of social control mechanisms in reducing fear, of which ‘public social control’ was determined to be of utmost importance. They

Conclusions ¦ 87

broadly defined public social control as ‘…the ability of the community to secure public goods and services that are allocated by agencies located outside the neighborhood (17). Despite being a relatively underdeveloped concept at this stage, a number of conceptualizations and applications of public social control have since been identified. Of particular relevance are perceptions of government responsiveness, and perceptions of police effectiveness.

GOVERNMENT RESPONSIVENESS Public social control manifests in the ability of the state to satisfy individual needs through the provision of goods and services. The state therefore, has a responsibility to preserve social order, by way of protecting civil liberties and maintaining order (Tyler 2003). Indeed, there is evidence from the literature to support the notion that fear of crime can be reduced through greater government responsiveness (Bursik and Grasmick 1993; McGarrell, Giacomazzi and Thurman 1997). Within the context of cybercrime, numerous studies have highlighted the importance of government support in helping to promote confidence in electronic banking as individuals may become less fearful of cybercrime if they are aware that the government supports these ventures. One case study of electronic banking in Vietnam emphasized the need for government support for the development of electronic banking. The study indicates that government support can take the form of enacting cyber laws to build customer confidence in the online economy and the establishment of a specialized task force to investigate and prosecute perpetrators of online offences. The funding of educational campaigns to promote the benefits of electronic banking and the funding of research to investigate the


implications of fear of cybercrime on the digital economy were also highlighted as possible supportive actions that can be made by governments. Governments need to play a greater supportive role in electronic commerce which may influence those who have yet to adopt the use of this service to take advantage of the numerous benefits offered by electronic banking systems.

POLICE EFFECTIVENESS Research suggests that members of the public who believe the police to be effective in addressing crime, will experience lower levels of fear. J.E. Hawdon, J. Ryan and S.P. Griffin (2003) for example, demonstrated that among their sample, individuals revealing higher levels of fear were more likely than others to view the police as ineffective in addressing crime. The police are responsible for the maintenance of law and order; as such, the social control exerted by the police is heavily related to the perceptions held by citizens as they relate to police effectiveness, since it plays a critical role in enhancing or depleting levels of trust. In order for customers to feel comfortable engaging in e-banking, it is therefore essential that they believe that the commission of cybercrimes will be met with swift and adequate punishment. This involves a close working relationship between the police, banks and their customers to ensure the prosecution of offenders, which in turn will earn the trust of existing and potential users.

ROLE OF FINANCIAL INSTITUTIONS Financial institutions providing e-banking facilities have a pivotal role to play in reducing levels of fear and thus increasing e-banking usage. It has already been

Conclusions ¦ 89

established that the adoption of electronic banking services by customers is largely attributed to a feeling of security, trust and confidence in electronic banking systems as the fear of cybercrime can negatively impact the banking industry, leaving individuals apprehensive about engaging in the process. Banks will also need to play their role by strengthening website security, enhancing their web designs and improving systems that have languished in the propriety queue in order to foster a sense of security. For as long as electronic banking has been around, consumers have been concerned about the security of the process. It should therefore come as no surprise that security is a critical aspect of Internet banking. Therefore, this study has revealed that individuals’ acceptance of Internet banking is also affected by their perceptions of security. Where individuals feel that banks have taken the necessary precautions to ensure the safety of their personal information and funds, they will be more inclined to utilize the electronic banking services offered. The fear of cybercrime therefore, may not be as high as individuals will feel more secured. This therefore suggests that it is appropriate to incorporate security as one of the determinants of behavioural intention to use Internet banking (Sudhahar and Karthikeyan 2010). One of the major themes to emerge from this study was the role played by the media in enhancing levels of fear. Going forward, positive communication and publicity must be central to the strategies of banks to encourage new users. Since positive messages act as confidence builders that enhance trust, the effective use of communication will aid in changing negative perceptions about e-banking and facilitate greater usage. Although the mass media is driven to sensationalize crime rather than to reassure the public, banks need to attempt to work with them to educate their


customers about cybercrime and electronic banking. The banks also need to impress upon media houses the need to be more responsible and provide a more balanced view of electronic banking instead of merely relying on the risks associated with electronic banking and sensationalizing incidents of cybercrime. Through carefully developed and delivered messages, banks should consistently work along with media partners to minimize the fear of cybercrime in order to ensure the viability of electronic banking. The improvements of electronic banking systems, the cultivation of a sense of security and knowledge through educational campaigns as well as the devising of effective policies to address cybercrime, are therefore essential to the neutralization of the fear of cybercrime. Without these critical steps, the fear of crime will continue to cripple the electronic banking industry, leaving banks dangling precariously on the edge of financial ruin. Despite the many risks associated with electronic banking, some customers are still willing to engage in the process; this is regardless of the fact that some may still harbour residual fear of cybercrime or that they may have been privy to the media’s negative portray of electronic banking. However, in order to reap the benefits afforded by the use of electronic banking services and to maintain some semblance of security during this process, some individuals have invested in the use of protective mechanisms such as anti-virus software. Therefore, the existence of this added benefit of security helps to assuage the fear of cybercrime and makes some individuals more willing to traverse cyberspace and face the risks involved in electronic banking. Additionally, the fear of cybercrime is contingent on a number of factors including the need for electronic banking services and intrinsic qualities such as a person’s self-efficacy, confidence,

Conclusions ¦ 91

and trust in the bank and the consumer’s knowledge of technology. Only if all stakeholders work together can digital technologies truly transform our society and drive economic growth and development.

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