Revolutionizing Digital Banking: Understanding Determinants and Barriers of Neo-Banking Adoption Through the Lens of Behavioral Reasoning Theory

Abstract

This study applies behavioral reasoning theory (BRT) to investigate the enablers and barriers to neo-banking adoption. It offers nuanced insights into the factors that influence consumers' acceptance or rejection of this transformative financial services model. By employing a robust methodological approach, this research amalgamates the analytical power of PLS-SEM (partial least squares structural equation modeling) and fsQCA (fuzzy-set qualitative comparative analysis) approaches to explore the pathways of proposed effects and examine causal asymmetry. The data for this study were obtained by administering an online survey questionnaire to a sample of 546 digital banking customers. The study's findings indicate that adoption intentions are strongly influenced by the accessibility of neobanks and the cost savings associated with their services. Conversely, perceived security is also found to be an essential factor that shapes the attitude of Indian customers toward adopting neo-banking. Findings also reveal the moderating role of self-efficacy and trust in the link between reasons, attitude, and intention to adopt. The fsQCA results reinforce the PLS-SEM findings and indicate four configurations leading to the high adoption of neo-banking. The study provides strategic insights to refine marketing approaches and operational frameworks for neo-banking, accelerating its growth in emerging economies.