FINTECH IN THE COVID-19 ERA: FACTORS THAT AFFECT FINTECH ADOPTION IN PAKISTAN

Abstract

Financial technologies, commonly known as Fintech have brought changes to every aspect of financial services especially during the pandemic Covid-19. They are making it possible for the users of digital devices to access financial services and have become significantly important in the world economic system. Financial technology innovations are considered an important factor in deepening the inclusion of general public into the financial sector. However, their widespread application and acceptability still have room for improvement, particularly in the context of developing nations like Pakistan. This study aims to advance the idea that a thorough understanding of the factors that influence the use of financial technology can increase those technologies' acceptance and adoption. The primary research question this study intends to answer is that do cognitive-behavioral factors influence fintech adoption and usage? Using online banking apps as a Fintech innovation, this study adopts the constructs of the Unified Theory of Acceptance and Use of Technology and Extended Valence Framework. Four constructs (Performance expectancy, Effort expectancy, Social Influence, and Facilitating Conditions) from the Unified Theory of Acceptance and Use of Technology, two (Risk and Trust) from the Extended Valence Framework are used as the independent variables, Behavioral intention as the mediator and Actual usage is used as the main dependent variable of the study. A survey instrument based on UTAUT is used to collect quantitative data during the Covid outbreak to predict online banking application adoption and usage in individuals of the academia and corporate sector during the pandemic era. An online survey form on Google Forms was floated among 550 individuals, 400 responses were collected and further analyzed. SPSS-26 is used to run various analysis and techniques to analyze the collected data and conclude results. Results of the study indicate performance expectancy, effort expectancy, social influence, facilitating conditions, trust, and risk as significant factors that contribute to DRSML QAU iii the adoption of digital banking applications. The contribution of this paper is that it is one of the first studies conducted towards the use of predictive behavioral economics model in understanding consumer behavior in the context of developing countries like Pakistan. Moreover, fintech and financial inclusion are emerging areas in the field of behavioral finance and there are a number of available avenues to contribute to the literature. Keywords: Fintech, Digital Banking Applications, Covid-19, Internet, Unified Theory of Acceptance and Use of Technology, Behavioral Intention, Actual Usage