Factors Influencing Consumer Adoption of Digital-Only Banks in the UK.

Abstract

This study aims to develop and empirically test a conceptual model based on Unified Technology Adoption and Usage Theory-2 to understand factors influencing the adoption of digital-only banking services in the UK. The proposed model integrates fintech-specific themes such as perceived risk, trust, security, environmental concerns, micro-investing opportunities, financial incentives, and cryptocurrency access with established UTAUT-2 technology adoption theory framework. Hypotheses were formulated to assess relationships between these constructs and behavioural intention to adoption.  Structural equation modelling with SMART PLS-4 software was used to test the relationship between independent variables with the dependant variable. Data from 391 respondents, collected via an online survey using convenience and purposive sampling, was analysed. Findings indicate that behavioural intention towards adopting digital-only banks is significantly influenced by environmental concerns, performance expectancy, perceived risk, hedonic motivation, security, trust, social influence, and micro-investing opportunities. The model’s explanatory power R² stood at 31%, suggesting moderate predictive strength. The study provides insights into the adoption drivers for digital-only banks in the UK, offering practical implications for fintech managers, developers, and policymakers aiming to foster growth and innovation in the sector. These findings contribute to filling a research gap in digital-only bank adoption.