TECHNOLOGY USAGE & FINANCIAL BEHAVIOR IN DIGITAL BANKING: INFLUENCE OF PERCEIVED RISK IN AN EMERGING ECONOMY

Abstract

The current study explores how digital financial consumer behavior (DFCB) in the fast-growing digital banking ecosystem in Pakistan is affected by technology adoption and it also explores whether perceived risk moderates’ relationship between technology adoption and digital financial consumer behavior. Its conceptual foundation is Diffusion of Innovation (DOI) theory where three dimensions (technological relative advantage, technological compatibility & technological complexity), used to measure technological usage. A well-designed questionnaire was administered to 360 participants of the digital banking in Punjab province of Pakistan, and hypotheses were tested using PLS-SEM. This empirical study showed that technology use has a positive effect on the digital financial consumer behavior, but perceived risk has a strong negative effect. In addition, positive influence of enabling factors on digital financial engagement is moderated and weakened by perceived risk. In the future, the research will add value to field by jointing DOI theory and perceived-risk literature in establishing financial conduct in the novel setting. The empirical analysis findings provide the practical advice to banks and fintech companies willing to encourage more digital use and interaction.