Exploring Neobanks Adoption: A Study Among the Young Customers in Kerala Using Technology Acceptance Model

Abstract

This research aims to explore the adoption and usage pattern of neobanks in Kerala using the Technology Acceptance Model (TAM) incorporated with trust and demographic characteristics. Data were collected from 210 young adults aged 17–35 through an online questionnaire. Hypotheses developed were tested using non-parametric tests like Mann–Whitney U test and Kruskal–Wallis H test in SPSS for demographic variables and partial least square-structural equation modelling (SEM) for the remaining variables. The results indicate that behavioural intention (BI) significantly influences actual neobank usage, with perceived usefulness (PU) and perceived ease of use (PEOU) that are crucial factors driving neobank acceptance. However, trust (T) does not significantly impact the BI to use neobanks among young customers but has a significant effect on PU. Additionally, gender emerges as significant demographic factor that affects neobank acceptance, while age, educational qualification, and occupation exhibit no significant effects. These insights help to identify key factors influencing neobank adoption, aiding in effective service expansion and business model development for neobanks. They also assist neobank managers in crafting marketing strategies that emphasize convenience and efficiency to attract and retain customers.