Decisional Factors Affecting Customers’ Intention To Adopt Digital Financial Services For Banks In Malawi’s Urban Areas

Abstract

Over the past 10 years, commercial banks in Malawi have strived to provide innovative banking platforms that encourage the adoption of digital financial services aimed at reducing operational inefficiencies resulting from queuing and prolonged customer waiting times inside urban banking halls. However, there is still low adoption of digital financial services in Malawi with prior studies focusing on the benefits of digital banking to customers and financial institutions rather than its determinants. The aim of this study was therefore to assess decisional factors that affect customers’ intention to adopt and use digital financial services for bank service centres operating in urban areas of Malawi. Technology acceptance model was the main theoretical framework that underpinned this study. A total of 384 questionnaires were administered across the four major cities of Malawi. However, 345 questionnaires were received out of the distributed 384 yielding a response rate of 89.8%. Data collected was entered into Stata statistical software and analysed using logistic regression analysis. The study revealed and concluded that convenience and trust are the major factors influencing customers’ intention to adopt and use digital financial services. The study, however, concluded that subjective norms have little influence on customers’ intention to adopt digital banking services despite a relative section of respondents between the ages of 55 – 60 years revealing that opinions of people influential to them mattered on their decision to use digital banking in performing transactions of higher values. Respondents within this category admitted that people’s perception on the vulnerabilities of digital banking services enhanced their decision to physically visit banking halls for certain important transactions or payments. However, this age group only accounted for 7% of the respondents, hence deemed not significant to form a reasonable inference that subjective norms had an influence on digital banking adoption. The study, therefore, recommends that commercial banks should enhance security of digital banking platforms to safeguard customer funds and personal information which will in turn increase trust towards digital banking services. Furthermore, financial institutions must also improve on user experience especially on the time taken to assist customers for failed transactions as increased instances force customers to use traditional banking models of physically visiting banking halls for services duly accessible on digital banking platforms. Further study areas should include in-depth research on challenges that commercial banks face in their efforts towards full adoption of digital banking in Malawi including the effectiveness of awareness campaigns used.