Technological risk is increasingly becoming a concept observed in the context of emerging technologies in the global ‘digital revolution’. Partly due to cyberspace and mobile network supporting innovative products, stronger digital distribution channels are increasingly occupying the firms’ list of priorities amidst industry competition. In the UK financial services, the banking sector in particular, the changing landscape is evident in the rise of mobile banking using smartphone banking apps (SBA). Although the sector is significantly investing in mobile capabilities, failure to address those who are not convinced regarding SBA use could potentially waste banks’ investments in developing and furthering such offering.
Identified as most suited to the digital age, ‘Generation Y’ will become more valued as they reach the zenith age of financial consumption. However, such generation’s risk perception of SBA remains under-researched. Using grounded theory approach, this mixed methods, exploratory research sought to determine the factors influencing risk perception of SBA by university undergraduate students at KCL, LSE and UCL. Through triangulation, the findings of semi-structured, face-to-face interviews (n=50) were analysed vis-a-vis the statistical results of cross-sectional, systematically randomised, intercept surveys (n=384).
The research found that among the different ways of banking (i.e., face-to-face, postal, telephone, ATM, Internet, and SBA), the level of risk perception of SBA is the highest, mainly influenced by the representative sample’s experience and knowledge of relevant technology. Such risk perception and influential factor, significant in both qualitative and quantitative data, point to a high salience of availability heuristic. Among external factors, the media has been identified as an important source of information and possessing a level of influence, especially for the non-users of SBA. Affect heuristic as well as perceived benefits are also influential factors in key decisions surrounding the use of SBA. Further, there is evidence to suggest that gender could play a variance in risk perception and trust of SBA, with more females viewing SBA as having more risks than benefits while males being more trusting to the SBA technology.
The results imply that the trend in SBA use would likely be more sustainable if any unfounded risk perception by the target market is properly addressed by stakeholders as part of their strategies and, if applicable, adjust risk communication to bridge gap and promote better understanding of the actual risks and actions to mitigate them. Further research is recommended to advance findings, perhaps to other market segments/settings and other emerging relevant technologies.
Evidence to inform risk relevant policy , The relevance of risk perceptionTopic #7
