This paper examines the factors affecting the growth of e-banking in Malaysia from the consumers' perspective. A Likert scale questionnaire survey is applied. The results show that there are seven factors influencing the growth of e-banking—convenience of usage (including Internet accessibility and ease of use), cost of services, trust in bank (bank's credibility), security concerns, awareness, reluctance of customers and government supports. The results indicate that all the factors are significant with respect to the consumers' willingness in using e-banking services. The limitations of this study are discussed and suggestions for future research are also put forward.

With the expansion of Internet usage, e-banking has become one of the most revolutionized components of today's economic growth. E-banking is a powerful value-added tool to attract new customers and retain the existing ones. With the proliferation of internet and computer usage, the electronic delivery of e-banking service has become ideal for banks to meet customer's expectations (Poon, 2008). Besides, it helps in eliminating costly paper handling and teller interactions in the increasingly competitive banking environment. The development of e-banking has become a priority for core advantage. The potential competitive advantage of e-banking lies in the areas of cost reduction and satisfaction of consumer needs. There is an increasing number of the various types of new financial distribution channels due to the innovation of extensive technology and advancement in the telecommunications sector. Banks attempt to gain competitive advantage in today's dynamic environment, which must therefore meld technology into building relationship and marketing activities (Moriarty et al., 1983).

Compatible with the demands of electronic marketplace, Malaysia has endeavored to develop e-commerce domestically. The banking organizations in Malaysia are offering online transactional services for consumers at homes via e-banking services. Pang (1995) claimed that computerization in the Malaysian banking industry got off to a slow start and only picked up momentum in the 1970s. Banks are transforming their traditional method of reaching their customers through virtual communications. In 1981, e-banking in Malaysia started with the operation of ATMs (Automatic Teller Machine), followed by telebanking during the 1990s. According to Balachander et al. (2000), the electronic revolution in banking basically centers on changes in the distribution channels of the financial institutions. ATMs, cash deposit machines, cheque deposit machines, PC banking, phone banking and banking kiosks are common types of banking service availabilities. All these have enabled the banks with a more economical substitute for bricks-and-mortar branches, available at any geographic location, even in shopping malls, university campuses, petrol stations, etc.

E-Banking in Malaysia, E-banking services, Technological innovation, Banking environment, Telecommunications sector, Automatic Teller Machine, ATMs, Secure Socket Layer , SSL, Personal Identification Number, PIN, Electronic Payment System, EPS, Web technology.