Factors determining behavioral intentions to use Islamic financial technology

Abstract

Purpose The purpose of this paper is to investigate the influential factors on behavioral intentions toward Islamic financial technology (FinTech) use in Indonesia, for all types of FinTech services as follows: payments, peer to peer lending and crowdfunding. Design/methodology/approach This study adopted structural equation modeling using the partial least squares approach to test the hypotheses. Based on purposive sampling, the questionnaire was distributed through an online survey and received 1,262 responses. Findings The results demonstrate that the latent variables, planned behavior, acceptance model and use of technology, have a significant impact on encouraging behavioral intentions to use Islamic FinTech. The “acceptance model” latent variable is the most influential factor. Research limitations/implications This study was conducted only in Indonesia; therefore, the results cannot be generalized to other countries. However, the study provides important strategic guidelines for policymakers in designing a framework to enhance the development of Islamic FinTech and to achieve financial inclusion. It is suggested that future studies include samples from FinTech users in different countries. Originality/value This study adds to the literature especially on the factors affecting behavioral intentions to use Islamic FinTech. There are limited studies concerning this topic, especially for Indonesia. The unique feature of this study is the use of a large primary data set that covers most provinces in Indonesia. Furthermore, this study focuses on three types of Islamic FinTech, namely, payments, peer to peer lending and crowdfunding.

Analyzing the Behavioral Intention Factors in Using Zakat-Based Crowdfunding Platform in Indonesia

“…In the Zakat-based crowdfunding platform model context, the Muslim crowd funders believe that using the platform will improve their zakat payment activities. Thus, performance expectancy has a significant impact and important variable to influence the intention to use financial technology products and services (Ahmad, Tarmidi, Ridzwan, Hamid, & Roni, 2014;Darmansyah, Fianto, Hendratmi, & Aziz, 2020;Raza, Shah, & Ali, 2019;Sedana & Wijaya, 2012). Therefore, the first hypothesis of this study is:…”

“…According to Huei, Suet Cheng, Chee Seong, Aye Khin, & Ling Leh Bin (2018), the individual perceives it easy, it will create a positive effect on the intention to adopt financial technology products and services. Thus, effort expectancy has a significant impact and important variable to influence the intention to use financial technology products and services (Ahmad, Tarmidi, Ridzwan, Hamid, & Roni, 2014;Darmansyah, Fianto, Hendratmi, & Aziz, 2020;Raza, Shah, & Ali, 2019;Sedana & Wijaya, 2012). Therefore, the second hypothesis of this study is:…”

“…If a lack of funding, Islamic FinTech can be a solution for any problems in MSMEs, apart from banking (Marzban, Asutay, & Boseli, 2014). KPMG (2019) reports that there are around 167 FinTech companies, including Islamic FinTech in Indonesia (Darmansyah et al, 2020). One example is KitaBisa.com, a donation-based crowdfunding platform model in Indonesia (Wahjono, Marina, & Widayat, 2015).…”

“…Following that, this study has an objective which is to test empirically factors influencing the behavioral intention of Muslim crowd funders to using the Islamic donation-based crowdfunding platform model based on the concept of Unified Theory of Acceptance and Use of Technology (UTAUT) Model proposed by Venkatesh, Morris, Davis, & Davis (2003, in Raza, Shah, & Ali, 2019. The theory has been used by researchers to examine the behavioral intention to adopt technological innovation, e.g., Darmansyah, Fianto, Hendratmi, & Aziz (2020)…”

Enhancing the Literacy of Shariah Financial Technology for Generation X, Y and Z in Indonesia

“…Financial technology is an innovation in technology-based finance. Transactions in Fintech include payment gateways, peer to peer lending, personal financial management, or crowdfunding (Fianto, Hendratmi & Aziz, 2020). Siregar (2016) states that digital-based financial services are currently developing in Indonesia, namely payment channel systems, digital banking, online digital insurance, peer to peer lending, and crowdfunding.…”