An investigation into factors enabling the diffusion and adoption intention of fintech services for bank consumers

Abstract

This research is about the central issue of challenges related to the adoption of fintech services in the context of Bahrain. Today, all financial service aspects seem to be affected by technology, fintech being one of them. Fintech development is in its early stages; many researchers and practitioners believe that it will shape up and define the future of the financial industry. Along with the development of fintech, scholars have focused on the application of information technology to financial services. Few scholars have studied the influence of fintech and the mechanism behind the consumer behavioral intention to adopt fintech services. This research, therefore, examines why consumers are willing or hesitant to adopt fintech services by integrating Technology Acceptance Model (TAM) with Diffusion of Innovation Theory (DOI). Further, the research investigates the critical factors that impact the behavioral intention to adopt fintech services. Also, this empirical study investigates whether the effect of perceived risk and trust on fintech adoption intention differs depending on the consumers' behavior using a conceptual model that was developed and validated for this purpose. An online questionnaire was designed and sent to the bank consumers to obtain responses from a sample population of 390 respondents targeted for this purpose. Reliability measure was tested using Cronbach's alpha and Structural equation modeling (SEM) was used to analyze the validity, conduct confirmatory factor analysis, and path analysis. Results of the analysis showed that out of the 15 hypotheses, 10 were accepted and 5 rejected. The main findings showed that three factors namely relative advantage, compatibility, and perceived risk are the most influential predictor of the dependent variable (intention to adopt fintech services), followed by compatibility and perceived risk of using fintech services, with perceived risk showing negative influence. The results also showed that complexity and trialability exert negligible influence on the dependent variable while observability was not found to have any significant relationship with the dependent variable. All the mediating variables namely perceived usefulness, perceived ease of use, and trust of fintech services were found to have a significant mediating effect on the relationships hypothesized. Additionally, the association between the exogenous variables was found to affect the relationship between the predictors and the behavioral intention of the consumer of banks to adopt fintech services. With regard to the main contribution of the research to knowledge, it can be seen that this research has combined four different concepts namely Diffusion of Innovation Theory (DOI), Technology Acceptance Model (TAM), perceived risk, and trust in one model that could be used to anticipate the influence of the predictors on the dependent variable with better predictive power. The research fills the gap in the literature on how to improve the number of adoption and diffusion of innovation factors notably relative advantage, compatibility, and perceived risk. Theoretically, this research has been successful in integrating the DOI and TAM in the context of fintech services to anticipate the behavioral intention of the consumer of banks to adopt fintech services. The conceptual model provides a useful method for practitioners to control the diffusion factors and improve the adoption of fintech services amongst the consumers of banks. Finally, this research provides new branches of research that could be investigated to further enhance and explain the adoption behavior of consumers of banks in Bahrain and other parts of the world.