Digital fraud and the adoption of digital banking services by customers in South Africa

Abstract

The banking industry in South Africa rapidly changed when traditional banks embarked on digital transformation initiatives. The digital transformation has come with challenges as the potential for digital fraud arguably increases as customers adopt digital channels. Customers therefore may have been afraid to adopt digital channels, which could have caused low adoption rates. The study aimed to investigate to what extent the threat of digital fraud affected customers' adoption of digital banking services in South Africa. Customer intention, perceived risk, perceived benefits, and trust were measured to examine the effects of digital fraud. A quantitative research approach was adopted in this study. The data from respondents was collected via a survey. Convenience sampling was adopted, and 350 respondents were targeted. However, only 150 responded to the survey. The response rate was 42.9%, which was deemed acceptable. The findings indicated that intention alone does influence adoption. The findings also indicated that perceived risk did not significantly influence adoption. Perceived benefits in this study significantly influenced the adoption of digital banking services. The study also indicated that trust is critical in mitigating the impact of perceived risk associated with digital banking services. The research focused on the adoption of digital banking services in South Africa. However, there was an opportunity to conduct further research in other industries and contexts. In conclusion, the research has shown that organisations that can demonstrate benefits when customers use their digital banking services and gain their customers’ trust will likely not experience decreased adoption and use of their digital service offering.