Benevolence, Integrity and Competence: Dimensions of Trust in Internet Banking

Kate McInnes, Xiaoli Lin, Central Queensland University

Huaxuan Li, The University of Queensland

Abstract
Consumer trust plays a vital role in the development of long- term relationships between an
organisation and its customers. Despite a plethora of research on trust in a general retailing
context, the concept has been somewhat overlooked in the area of internet banking. This
paper aims to fill the gaps in the literature by determining whether previously identified
dimensions of trust, including benevolence, integrity, and competence, are applicable in an
internet banking environment. The paper also examines how a better understanding of these
dimensions may aid marketers in the development of a trustworthy website. The study
proposes, and concludes, that a higher consumer perception of benevolence, integrity, and
competence is positively related to a higher level of consumer trust. The article also suggests
that there are a number of other factors that may moderate this relationship. The findings
imply that those involved in the marketing of internet banking services must aim to enhance
the consumers perception of benevolence, integrity, and competence, in order to gain trust
and engage in meaningful customer relationship programs.

Introduction
The commercialisation of the Internet has had a huge impact on the way that society operates,
including the way we work, shop, play, and even the way we conduct our banking activities.
While millions of businesses have attempted to take advantage of the cost savings that the
Internet offers, not all of these e-commerce activities have proved as successful and as
popular as online banking. According to Floh & Treiblmaier (2006, p98) online banking now
boasts the title of the fastest growing Internet activity in the past five years, and has almost
53 million users in the U.S alone.
Despite the benefits of internet banking, the use of an electronic medium makes it harder for
banks to gain consumer trust (Meuter, Ostrom, Roundtree & Bitner, 2000). Because trust has
a huge influence on a consumers commitment to an online provider (Floh & Triebllmaier,
2006), banks should attempt to understand the determinants of trust and use this to develop
stronger, more meaningful relationships with their customers, and consequently achieve
greater profits.
Although there is a plethora of research on consumer trust, there is little material that focuses
on the concept in an online context, and particularly, in online banking (McCole, 2002). The
issue of trust in online banking, and specifically, how trust is manifested and maintained,
warrants further research (McCole, 2002). This paper aims to fill the gaps in current literature
by determining whether previously proposed dimensions of trust (benevolence, integrity and
competence) apply specifically to internet banking, and if so, how an understanding of these
dimensions may aid banks in the development of trustworthy websites and long- term
customer relationships.

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Literature Review
As one of the most attention-attracting facotors in relationship literature that has been
investigated widely (e.g. Sahay, 2003; Coulter & Coulter, 2002; Heikkila, 2002; Jap, 1999;
Doney & Cannon, 1997; Morgan & Hunt, 1994; Moorman et al., 1993; Ring & Van de Ven,
1992; Anderson & Narus, 1990; Gronroos, 1990; Crosby et al., 1990; Parasuraman et al.,
1988, 1985), trust has been defined in various ways. Morgan & Hunt (1994, p.23) proposed
trust as existing when one party has confidence in an exchange partners reliability and
integrity, while Chen & Dhillon (2003, p.303) labelled trust as the reliability and
dependability of the vendor offering products or services. Rousseau et al. (1998, p.395)
proposed a definition that would apply to all disciplines describing trust as a psychological
state comprising the intention to accept vulnerability based upon positive expectations or
behaviour of another under conditions of risk and interdependence.
Trust is a multi-dimensional construct (Chen & Dillon, 2003; Mukherjee & Nath, 2003;
McCole, 2002; Wing & Angie, 2006; Papadopoulou, Kanellis & Martakos, 2003) with
integrity, competence and benevolence being the focus of several studies (Wing & Angie,
2006; Jarvenpaa, 1998; Papadopoulou, Kanellis & Martakos, (2003) and have formed the
basis of numerous conceptual models (Chen & Dhillon 2003, Wing & Angie, 2006).
While literature on trust and the dimensions of trust is relatively abundant, studies relating
trust to internet banking are relatively scarce (Mukherjje & Nath, 2003). Much research in
internet banking is focussed on the adoption of internet banking. Hence, it is the purpose of
this study to fill the gap by looking at how the consumer perceptions of integrity,
benevolence, and competence will have an effect on consumer trust in an internet bank. We
make the following hypothesis:
H1: a higher consumer perception of banks benevolence is positively related to a higher level
of online bank trust.
H2: a higher consumer perception of banks integrity is positively related to a higher level of
online bank trust.
H3: a higher consumer perception of banks competence is positively related to a higher level
of online bank trust.

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Benevolence

Integrity

TRUST
of internet
banking

Competence

Methodology
The dataset used was obtained from an earlier study on Internet banking. Some of the items in
that questionnaire are relevant to this current topic and hence were used to test the hypothesis
of this study. The data was originally collected from 106 users of internet banking through a
self-administrated online survey.
Ten (10) items were useful for this study. The integrity construct was operationalized using
three items measured on a five-point likert scale, adopted from Chen & Dhillon ( 2003)s
work. Two items of McCole & Palmer (2002)s work were used to measure competence and
two items of Mukherjee & Nath (2003)s work to measure benevolence. One item was used to
measure respondents overall trust level towards their online bank. Demographic questions
including gender and age were also asked.

Data Analysis and Results

Factor analysis, using principal components extraction and varimax rotation, was performed
on the three items that were used to measure integrity, the two items on competence and the
other two items on benevolence and successfully yielded a single factor on all three
constructs. Reliability test on the items revealed Cronbachs Alpha coefficient of 0.52, 0.56
and 0.61 respectively which is acceptable for exploratory research (Nunnally, 1967). B y
averaging the three items on integrity, the two items on competence and the other two items
on benevolence, an overall score for each of the three constructs were obtained. A regression
analysis was then performed using overall bank trust level as dependent variable while
integrity, competence, benevolence and demographic factors (age and gender) as independent
variables. The coefficients for integrity, competence and benevolence were 0.82, 0.76 and

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0.65 respectively (all at 5% level) while age and gender are not significant. The result hence
supports all the three hypothesis proposed.

Conclusion
This paper presents a study on the influence of the combined dimensions of benevolence,
integrity, and competence on trust in an online banking context. Through a thorough review
of literature, the authors determined that benevolence, integrity, and competence were
recurrent themes in trust literature, and hypothesised that a higher consumer perception of
their banks benevolence, integrity, and competence is positively related to a higher overall
trust in the bank by that consumer.
An analysis of 106 surveys proved a significant relationship between benevolence, integrity,
and competence and trust in an online banking environment, and suggested that a higher
overall perception of these dimensions resulted in a higher overall trust.
The findings of this study have a number of important implications for academics and
marketing practitioners alike. For scholars, the research helps to expand the current literature
and understanding on the topic, and also provides a number of angles for future research. For
marketing practitioners, the results have more practical applications in the realm of website
design. Marketers must realise the importance of the dimensions benevolence, integrity, and
competence, and should attempt to provide banking services in a way that enhances the
customers perception of the banks benevolence, integrity, and competence.
Competence relates to the making and the fulfilment of a promise (Chen & Dhillon 2003). In
an online banking context, competence may be displayed through providing search facilities
and recommendations about new banking services and offers, which enable a promise to be
made. The bank should then fulfil the promise by executing the requests of the customer with
promptness and correctness (Papadopoulou, Kanellis & Martakos, 2003). Online banks may
enhance the perception of their benevolence through regular communications with customers,
and through the provision of timely information regarding privacy and security risks. Any
activities that show the bank as placing the interests of the customer before their own will be
highly regarded by customers. In addition, open, honest communication with customers and a
demonstrated consistency in behaviour will increase the perception of an online banks
integrity. Organization culture, top management support and collaboration between marketing
and IT teams can also enhance integration (OLeary, Rao & Perry, 2004). Overall, those
involved in marketing electronic banking sites should place significant emphasis on qualities
such as benevolence, integrity, and competence in order to develop and maintain meaningful,
long- term relationships.

Limitations and Future Research

While this study is one of the first to assess the application of previously proposed dimensions
of trust in an internet banking environment, it is an exploratory study and suffers limitation.
The study didnt take into consideration the role of a number of important consumer
characteristics, firm characteristics, and website characteristics in the development of
consumer perceptions of benevolence, integrity, and trust. As suggested by Bramall, Schoefer
& McKechnie (2004), firm characteristics such as the size and reputation are expected to have
an influence on consumer trust, as are the professionalism of the website and the use of third-

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party trust seals such as TRUSTe and BBBOnline. In addition, consumer related
characteristics including their cognitive abilities, their attitude towards computers and the
Internet, their previous banking experiences, and their perceived risk of internet banking in
general are expected to influence their perceptions of benevolence, integrity, and competence,
and therefore overall trust. These characteristics mentioned were not reflected due to the
exploratory nature of the study.
While this study has identified three dimensions involved in developing trust in online
banking, it does not pinpoint specific sources of these dimensions. Further research may need
to be carried out to determine what specific sources a customer may look to in order to
formulated their perceptions of benevolence, integrity, and competence. i.e. where and how
does a customer formulate their perceptions of an online banks
benevolence/integrity/competence?
Furthermore, research could be carried out to determine how benevolence, integrity, and
competence individually influence a consumers overall trust. i.e. Is any one of these
characteristics more important than the others in generating trust? Can a positive perception
of one dimension override a negative perception of another to develop a high level of trust?
Finally, the generalizability of this study can be determined by researching into different
countries and cultures.

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