An Empirical Study on the Drivers of Customer Preference and Digital Banking Adoption

Abstract

The instant advancement of financial technologies has significantly transformed banking services, positioning digital banking as a vital component of contemporary financial systems. Identifying the key determinants that shape customers’ intention to adopt digital banking is essential for financial institutions aiming to enhance customer engagement and accelerate digital transformation. This study examines the influence of four major factors perceived usefulness (PU), perceived ease of use (PEU), social influence (SI), and perceived trust (PT) on customers’ intention to use digital banking services. Data were collected from 228 respondents across India using a structured questionnaire based on a five-point Likert scale and analysed through SPSS. The reliability of the constructs was assessed using Cronbach’s alpha, while regression analysis was employed to test the proposed hypotheses. The results reveal that all four variables exert a positive and significant effect on digital banking adoption, with perceived trust and perceived usefulness emerging as the strongest predictors. The study highlights the growing importance of secure, user-friendly, and socially influenced digital banking platforms in shaping customer behaviour. These findings offer valuable implications for banks, policymakers, and fintech firms in designing effective strategies to enhance user adoption and foster sustainable digital banking ecosystems.