Understanding Benefit and Risk Framework of Fintech Adoption: Comparison of Early Adopters and Late Adopters

Abstract

Financial technology (Fintech) service has recently become the focus of considerable attention. Although many researchers and practitioners believe that Fintech can reshape the future of the financial services industry, others are skeptical about the adoption of Fintech because of the considerable risks involved. Therefore, we need to better understand why users are willing or hesitant to adopt Fintech, wherein, positive and negative factors affect their adoption decision. Based on the net valence framework theoretically embedded in theory of reasoned action, we propose a benefit-risk framework which integrates positive and negative factors associated with its adoption. Based on the empirical data collected from 244 Fintech users, this study initially investigates whether perceived benefit and risk significantly impact Fintech adoption intention. We then examine whether the effect of perceived benefit and risk on Fintech adoption intention differs depending on the user types. Results show that legal risk has the biggest negative effect, whereas convenience has the strongest positive effect on Fintech adoption intention. The differences between early adopters and late adopters are driven by different factors.

Development and Validation of Instruments Adoption FinTech services in Indonesia (Perspective of Trust and Risk)

“…In a study conducted by Damghanian [22], on consumer behavior, it is often said that risks have a sense of multidimensional structure and consumers believe in the possible negative consequences of use. According to Lee and Ryu [25], [26], Risk has an important role and proposes several indicators related to elements of risk such as security, finances, social, time.…”

Improving Financial Service Innovation Strategies for Enhancing China’s Banking Industry Competitive Advantage during the Fintech Revolution: A Hybrid MCDM Model

“…Fintech is a portmanteau that combines "finance" and "technology" and involves the integration of finance and emerging technologies such as cloud computing, big data, and artificial intelligence (AI) [1]. This combination provides users with more innovative financial services including mobile payments, crowdfunding, peer to peer (P2P) lending, insurance, and wealth management [2][3][4][5]. Rapid development in IT and the subprime crisis in 2008 triggered a long-term global economic slowdown.…”

“…Fintech companies have recently started expanding their business scope beyond online business into mobile business, such as mobile payments and remittances, and from traditional banking services to innovative financial services. Citigroup estimated that Fintech's growth will lead to another 1.8 million job losses in Europe and the US in the next decade [5,10]. The increasing investments by Fintech companies in financial service innovation R&D have led to dramatic changes in the business environment and fierce competition among banks.…”

Determinants of Mobile Fintech Uptake in Kenyan Microfinance Sector

“…Liébana& Rubio, [27] research to explore mobile payment adoption from the merchants' perspective through predictive and explanatory modeling highlighted utility of the mobile payment systems, perceived useadvantage, experience with tradition payments systems, income of the company and the number of employees as the five variables most significant in the intention to use m-payment services. Ryu [28] identified economic benefit as the most common and consistent motivation for adoption. The economic benefit was in terms of lower capital and transactions costs as compared to traditional financial services.…”

“…This study reviewed the following theoretical frameworks for adoption of technology innovations to inform the appropriate research framework for this study: Technology Acceptance Model (TAM) [29]; Diffusion of Innovation Theory (DOI) [30]; Disruptive Innovation Theory; and Technological, Organizational and Environmental (TOE) model [31]. TAM is a model largely applied in studies to predict adoption of fintech like mobile payments, from the individual's level [24,28,25,26]. TAM does not consider external variables such as impacts from technology providers, monetary resources and clients [32].…”