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Mobile banking (m-banking) is defined as an innovative banking service offered to consumers by financial services firms, such as banks, credit unions, and microfinance institutions, for conducting various transactions via a portable device, such as a mobile phone, smartphone, or tablet anytime anywhere (Shaikh & Karjaluoto, 2015). Despite the noted benefits of using mobile devices for banking purposes and conducting transactions remotely, the security of consumers’ personal as well as banking information is paramount, and breaches of either create consumer skepticism, which lowers the adoption rate of m-banking services.
In addition, increasing security concerns and scares among consumers living in developing countries, which have fragile infrastructures, are becoming vexing challenges for banking institutions. Similarly, risks are generally considered to be higher when conducting transactions online and remotely using portable devices, which are prone to hacking, loss, and misuse. Therefore, customers who use these devices for banking are commonly reluctant to make payments and transfer funds on them because the risk may be high when compared to traditional (branch-oriented) banking. Considering this paradox, prior research (e.g., Alalwan et al., 2017; Masrek et al., 2014; Shaikh & Karjaluoto, 2016a; Shen & Chiou, 2010) has addressed the antecedent “Trust” and “perceived risk” (PR) as crucial factors in consumer behavior and purchase decisions, especially in the context of electronic commerce in general and digital banking in particular.
Against this backdrop, this study contributes to the ongoing debate on m-banking adoption antecedents and examines the effects of perceived risk, effort expectancy and performance expectancy on consumer behavior when accepting m-banking services in Pakistan. The research questions on which the objectives were evaluated were as follows: First, how does perceived risk affect consumers’ intentions and attitudes when choosing to accept m-banking services? Second, how does perceived risk moderate the association between effort expectancy – performance expectancy, effort expectancy – attitude, and effort expectancy – adoption intention link? Third, what are the roles of effort expectancy and performance expectancy in the pre-adoption stage of m-banking services?
The findings of this study are encouraging for banking companies and non-banking institutions, such as mobile application developers, the telecom sector, and rapidly emerging FinTech start-ups. Moreover, this study offers valuable policy implications for government regulatory institutions, providing better insight into mobile-based banking services as well as the factors leading to acceptance. The article concludes with a series of recommendations for the development of m-banking as a tool to expand the access to financial services to a demographically disbursed population.
In the remaining sections, we will present the literature review followed by research model and hypotheses. Then we present the research methodology, and the results. A discussion of the study’s findings, theoretical contributions, practical implications, limitations, and recommendations for future research will conclude this paper.