Mobile banking users prioritize trust and safety over performance

While perceived security emerged as the strongest influence on adoption intention and actual usage, perceived risk did not show a statistically significant effect. This runs counter to the traditional assumption that fear of cyber threats deters mobile banking use. One possible explanation lies in evolving regulatory frameworks such as GDPR, which may have bolstered consumer confidence in data protection.

In an era of rising digital fraud and data breaches, mobile banking users are no longer swayed by convenience alone. What matters now is whether they believe the app and the institution behind it can truly protect their money.

A new peer-reviewed study published in Computers, titled "Towards a Better Understanding of Mobile Banking App Adoption and Use: Integrating Security, Risk, and Trust into UTAUT2," delivers the most comprehensive analysis yet of what drives user behavior in mobile finance. Led by researchers from the University of Warwick, the study finds that perceived security and institutional trust are the dominant forces behind adoption, far outweighing traditional predictors like performance or peer influence.

Which factors have the strongest influence on adoption and usage behavior?

The study collected data from 315 mobile banking users in the UK using an online survey and analyzed it through structural equation modeling. Results showed that perceived security was the most powerful predictor of behavioral intention to use mobile banking apps. Users who believed their transactions were secure expressed the strongest intent to adopt and continue using these services. Institutional trust - confidence in the bank itself -  and technological trust - faith in the internet and app platforms - also significantly predicted adoption behavior. Notably, these constructs had more impact than traditional predictors such as performance expectancy or social influence.

Five constructs from the original UTAUT2 model were validated in the mobile banking context: effort expectancy, facilitating conditions, hedonic motivation, price value, and habit. Users reported higher intention to use apps they found easy to operate, fun to engage with, and cost-effective. They were also more likely to adopt mobile banking when such behavior was habitual and supported by adequate infrastructure and support systems.

In contrast, performance expectancy and social influence were not significant predictors in this context. The findings suggest that UK users are already familiar with the functional benefits of banking apps and are not easily influenced by peers when making decisions related to financial technologies. This reflects a maturity in digital banking use, where personal experience and trust in infrastructure play a greater role than peer recommendations.

What role do security and risk perceptions play and how are they moderated by demographics?

While perceived security emerged as the strongest influence on adoption intention and actual usage, perceived risk did not show a statistically significant effect. This runs counter to the traditional assumption that fear of cyber threats deters mobile banking use. One possible explanation lies in evolving regulatory frameworks such as GDPR, which may have bolstered consumer confidence in data protection.

Still, the study finds that the impact of perceived security on behavior is deeply moderated by demographic variables. Young males with higher incomes and education levels in the early stages of mobile banking use showed a stronger sensitivity to security issues. Meanwhile, the impact of institutional trust was more pronounced among older women with higher income and education, particularly those with longer experience using mobile banking.

These insights highlight the nuanced ways in which security concerns intersect with age, gender, experience, and socio-economic status. They also indicate that universal strategies may not be effective. Instead, banks and app developers must craft differentiated communication and support strategies for distinct demographic segments.

For example, younger users may respond better to enhanced biometric authentication and transparent in-app security tutorials, while older users may prioritize visible signs of institutional credibility, such as third-party endorsements or ISO certifications. Gender differences, too, must be acknowledged in shaping both the user interface and backend support systems.

Can the UTAUT2 model still explain adoption without accounting for trust and security?

The study delivers a clear verdict: no. The original UTAUT2 model, when applied alone, explained only 41.5% of the variance in users’ behavioral intentions to adopt mobile banking. When the new constructs, security, risk, institutional trust, and technological trust, were added, the explanatory power of the model jumped to 79%. For actual usage behavior, the updated model explained 54.7% of the variance, up from just 15.9% in the baseline UTAUT2 framework.

This substantial improvement underscores the importance of trust and security in digital finance, especially in high-stakes contexts like mobile banking where sensitive personal and financial data is constantly at risk. It also supports the argument that security perceptions are not just a background concern but a direct and measurable driver of technology adoption behavior.

Interestingly, the study also introduces a complex matrix of moderation effects. Variables such as age, income, education, gender, and mobile banking experience do not just influence adoption directly - they shape how users interpret security, risk, and trust. For instance, the influence of technological trust on adoption was stronger among older users with more experience and higher education, suggesting that trust builds cumulatively over time with exposure.

This multi-layered understanding opens the door for more precise interventions. Regulators, banks, and developers alike can use these findings to design targeted campaigns, enhance trust-building mechanisms, and ensure that security features are both robust and user-centric.

Redefining the roadmap for mobile banking adoption

The implications of this research extend well beyond theoretical modeling. For banking institutions, especially in markets with maturing digital infrastructure like the UK, the message is clear: advancing usability is not enough. Security assurance, transparency, and institutional credibility are the new pillars of user engagement.

For developers, the findings call for embedding dynamic security features such as real-time alerts, adaptive authentication, and customizable privacy settings into app architecture. These tools not only enhance protection but also reinforce users' sense of control and trust.

Policy makers can leverage these insights to refine national digital finance strategies, ensuring that regulatory frameworks incentivize trust-building practices without stifling innovation. Investment in cybersecurity education, especially for older demographics, will also be key to expanding digital inclusion.