Adoption of Digital Financial Services in Pakistan : A UTAUT3 Perspective

Abstract

This study investigates the factors affecting consumer behavior regarding the use and adoption of digital financial services in Pakistan. It encompasses fintechs, financial institutions that operate digitally, and the potential of these entities in achieving future business successes. It focuses on the digital operations of financial institutions, their opportunities, and how they can capitalize on the recent positive strides towards consumer acceptance of digital financial services. Alongside this, the study emphasizes the necessity of a regulatory framework to help both new market entrants and established players. After all, the unbanked and underbanked of Pakistan can only access digital financial services if those services are offered at a low enough price that the average consumer can afford them. In this research, we will empirically assess the most recent version of the Unified Theory of Acceptance and Use of Technology (UTAUT 3) to identify the factors that lead to the adoption of fintech in Pakistan. A quantitative method of research was used, consisting of a survey of a large number of people from varied demographics, including different educational backgrounds, income levels, age groups, and gender to achieve a semblance of a nationwide study. For this study, the survey was administered online as well as in physical form to allow for more flexibility in participation. We then used partial least squares and structural equation modeling (PLS-SEM) to analyze the results of the survey to achieve an understanding of the Conditional Adoption effect. We found that the behaviors and intentions of consumers in adopting and using digital financial services are determined by five key factors: perceived ease-of-use, performance expectancy, personal-innovativeness, security perceived, and social influence.