Why People Willing or Hesitant To Use Fintech

Industrial Management & Data Systems
What makes users willing or hesitant to use Fintech?: the moderating effect of
user type
Hyun-Sun Ryu,
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Users willing
What makes users willing or or hesitant to
hesitant to use Fintech?: the use Fintech
moderating effect of user type

Hyun-Sun Ryu 541
Software College, Sungkyunkwan University, Suwon, The Republic of Korea
Received 25 July 2017
Revised 20 December 2017
Accepted 23 December 2017
Abstract
Purpose – The purpose of this paper is to better understand why people are willing or hesitant to use
Financial technology (Fintech) as well as to determine whether the effect of perceived benefits and risks of
continuance intention differs depending on user types.
Design/methodology/approach – Original data were collected via a survey of 243 participants with
Fintech usage experience. The partial least squares method was used to test the proposed model.
Findings – The results reveal that legal risk had the most negative effect on the Fintech continuance
intention, while convenience had the strongest positive effect. Differences in specific benefit and risk impacts
are found between early and late adopters.
Originality/value – This empirical study contributes to the novel understanding of the benefit and risk
factors affecting the Fintech continuance intention.
Keywords Continuance intention, Perceived risk, Fintech, Perceived benefit, Net valence framework, User type
Paper type Research paper
1. Introduction
Advances in information technology (IT) have led to the rapid expansion of new and
innovative financial services, often called financial technology (Fintech), an emerging field
that is attracting a significant amount of attention. Fintech is a portmanteau combining the
words “financial” and “technology.” According to the Accenture report (Skan et al., 2014),
worldwide investment in Fintech companies and start-ups increased dramatically from
$4.05 billion (USD) in 2013 to $12.2 billion (USD) in 2014. Fintech provides new opportunities
to empower people by increasing transparency, reducing costs, eliminating middlemen, and
making financial information accessible (Zavolokina et al., 2016a). Fintech companies are
currently expanding their business scope beyond the online platform into the mobile
platform (e.g. mobile payment, mobile remittance). The traditional online-banking system,
provided by traditional financial institutions, is also changing into innovative and
differentiated financial services offered by non-financial providers.
While Fintech has attracted a significant amount of attention, a continuous use of
Fintech is still doubtful. Some users are skeptical of continuing to use Fintech because it has
considerable risks. More specifically, an investigation conducted in May of 2016 on Lending
Club, one of the most famous peer to peer (P2P) lending companies in the world, revealed
that the company’s executives sold $22 million in loans to investors, even though they knew
that those transactions did not meet the buyers’ criteria. Consequently, Lending Club’s
founder and CEO were forced out and Lending Club’s shares plummeted by 35 percent.
This scandal raised questions about the P2P lending business model. These unexpected
Fintech use risks may negatively affect users’ experience and impede their continuous use.
This work was supported by the Ministry of Education of the Republic of Korea and the National Industrial Management & Data
Research Foundation of Korea (NRF-2016S1A5A8017092) and by the Ministry of Science, ICT and Systems
Vol. 118 No. 3, 2018
Future Planning of the Republic of Korea under the National Program for Excellence in Software pp. 541-569
(R2215−16−1005) supervised by the Institute for Information and communications Technology © Emerald Publishing Limited
0263-5577
Promotion (IITP). DOI 10.1108/IMDS-07-2017-0325
IMDS If Fintech companies cannot retain customers and facilitate continuous use, they will not
118,3 recover these costs and achieve long-term success.
Customers want to determine the expected value of Fintech usage, considering both its
benefits and its risks. Customers will use the product or service if its benefits are greater
than its risks. Thus, Fintech companies are challenged to increase the potential benefits of
Fintech usage, while limiting its potential risks (Chan, 2015). Hence, it is necessary to
542 identify the factors that help determine why people continue to use Fintech.
Previous studies have identified the main drivers influencing user behavioral intentions
in the IS literature (Chiang, 2013; Kim et al., 2010; Liang and Yeh, 2011; Zhou, 2013).
However, few studies have simultaneously covered both benefits and risks in the Fintech
context. Furthermore, while there is a need to understand the user-group level behavior,
there has been little attempt to fill the gap in the user-group level research in Fintech.
To bridge these research gaps, the purpose of this study is to determine how specific
positive (perceived benefits) and negative factors (perceived risks) jointly influence the
continuous use of Fintech, based on a net valence framework theoretically grounded on
the theory of reasoned action (TRA) (Ajzen and Fishbein, 1977).
To increase the understanding of Fintech usage behavior, Fintech users were categorized
into early and late adopter categories. The user-group level behavior was then analyzed.
The following research questions motivated this study:
RQ1. Does users’ perception of benefits and risks significantly influence the Fintech
continuance intention?
RQ2. What specific benefit and risk factors influence the Fintech continuance intention?
RQ3. Do the perceived benefits and risks differ between early and late adopters?
Empirical data from 243 Fintech users in Korea were collected. The data were used to
explore the effect of the perceived benefits and risks on the Fintech continuance
intention. How the benefit and risk factors differed between early and late adopters was
then determined.
This study intends to make the following contributions to the literature. First, this study
attempts to enlarge the scope of the continuous usage decision to explicitly include both
positive (perceived benefit) and negative (perceived risk) factors simultaneously.
Second, based on the net valence framework, this study can help practitioners better
understand the benefit and risk perceptions that may be used to develop benefit-increasing
and risk-reducing strategies to encourage the use of Fintech. Lastly, our findings provide
Fintech companies with valuable information on what factors should be prioritized or
avoided when offering Fintech to their users.
The remainder of this study is organized as follows. Section 2 presents the theoretical
background, based on the previous literature. Section 3 discusses the research model and
the hypotheses. Section 4 describes the research methodology; this is followed by the
statistical analysis and results in Section 5. Finally, Section 6 presents the findings,
implications, limitations, and future research directions.
2. Theoretical background
2.1 Fintech
Fintech is an emerging filed that combines financial and IT services. Fintech is not confined
to specific sectors (e.g. financing) or business models (e.g. P2P lending and crowdsourcing).
Instead, it covers the entire scope of financial services and products traditionally provided
by financial institutions (Arner et al., 2015). Sweeney (2015) and Kuo-Chuen and Teo (2015)
defined Fintech as products or services in non-financial institutions created on highly
innovative and disruptive service technologies. Freedman (2006) described Fintech as
building systems that model, value, and process financial products (e.g. bonds, stocks, Users willing
contracts, money). Ernst and Young defined Fintech as an innovation in financial or hesitant to
services with technology as the key enabler. Lee described Fintech as a type of business use Fintech
using hardware and software technologies to provide financial services. Arner et al. (2015)
defined Fintech as technology-enabled financial solutions. Lee and Kim (2015) indicated
that Fintech is the technical process resulting from developing and establishing new
financial software which might affect the entire traditional system. Consequently, Fintech 543
might improve the performance of financial services and expand financial services to
mobile environments.
Although the link between financial and IT services is not novel, Fintech differs from the
existing electronic financial services in terms of opportunities, risks, and legal implications.
Current concerns of policymakers and industry are not coming from the technology itself.
They are concerned with who (e.g. IT companies) is applying the finance technology and
providing financial services to customers (Arner et al., 2015). The expanding and
strengthening role of IT is also a significant characteristic of Fintech. Development in
traditional electronic financial services has resulted in the emergent Fintech as an advanced
strategy to provide financial services (Arner et al., 2015). Ernst and Young explained the
differences between traditional electronic finances (e.g. e-banking) and Fintech. Specially,
they pointed out the new role of IT in Fintech. The role of IT in Fintech is not as a facilitator
or enabler to effectively deliver financial services, but as an innovator that disrupts the
existing value chain by bypassing the existing channels. Fintech companies can directly
provide their customers with standardized or customized financial services in the front
office by disrupting and substituting the existing channel.
In this study, Fintech was defined as “innovative and disruptive financial services by
non-financial companies, where IT is the key factor.” With Fintech, users may engage in a
variety of mobile services: making payments, transferring money, making loan requests,
purchasing insurance, managing assets, and making investments (Barberis, 2014). In this
study, Fintech includes mobile payment, mobile remittance, P2P lending, and
crowdfunding[1].
2.2 Benefit-risk framework

Users often make a decision with incomplete or imperfect information (Kim et al., 2008). As a
result, users often face a degree of risk, or uncertainty, in usage decisions. Risk is not the
only factor that users depend on in the context of continuance intentions. Perceived benefits
also provide users with an incentive for usage decisions (Wilkie and Pessemier, 1973).
Combining the perceived benefits and risks, Peter and Tarpey (1975) provided a net valence
framework assuming that consumers will perceive products or services with positive and
negative attributes and make decisions to maximize net valence, based on the negative and
positive attributes of the decision. The valence theory is also consistent with theories by
Lewin (1943) and Bilkey (1953), providing a theoretical framework for this study.
The purpose of this study was to better understand the net valence framework based
on the TRA. TRA asserted that attitudes toward behavior are precise predictors of
individual behavioral intentions (Ajzen and Fishbein, 1977; Benlian and Hess, 2011).
Drawing from TRA, the intention to continuously use Fintech would depend on users’
perceptions toward the use of Fintech, which is influenced by behavioral beliefs. More
specifically, the benefits and risks of Fintech usage might be considered behavioral
(positive and negative) beliefs that determine attitudes and subsequent behavioral
intentions and actions ( Jurison, 1995). Accordingly, the positive beliefs of Fintech usage
will increase the perceived benefits, whereas the negative beliefs will result in perceived
risks. Based on this notion, this study examined whether users would determine specific
benefit and risk factors that might lead to their continuous use of Fintech. The result
IMDS would be an overall attitudinal appraisal of Fintech usage (i.e. overall perceived benefit
118,3 and risk), leading to the Fintech continuance intention.
Table I illustrates that considerable studies have examined the benefit-risk framework
affecting the decision-making process to adopt or use IT services (Abramova and Böhme,
2016; Benlian and Hess, 2011; Farivar and Yuan, 2014; Kim et al., 2008; Lee, Park and
Kim, 2013; Lee, 2009; Lee, Chae and Cho, 2013). Most of these studies have considered the
544 perceived benefits and risks with a multi-dimensional concept that usually contains
several benefit and risk types. Kim et al. (2008) proposed a decision-making model about
e-commerce purchasing intentions. In the study, they considered both perceived benefits
and risks in a single dimension, not a multi-dimension. Lee (2009) proposed a theoretical
model to explain users’ intention to use online banking. In this study, perceived risk
was understood in a multi-dimensional manner (i.e. security/privacy, financial, social,
time/convenience, performance risks), whereas perceived benefit was seen as single

construct. Benlian and Hess (2011) analyzed opportunities and risks associated with
Research
Authors context Research content Main factors of benefit Main factors of risk
Kim et al. (2008) e-commerce Investigated the Single dimension Single dimension
antecedents of trust and
risk based on the benefits-
risks framework
Lee (2009) Internet Explained the intention to Financial benefit Security/privacy risk
banking adopt online banking Transaction speed Financial risk
combining perceived Information Social risk
benefits and risks transparency Time/convenience risk
Performance risk
Benlian and Software as a Assessed the major Cost advantage Performance risk
Hess (2011) service (SaaS) opportunities and risks Strategic flexibility Economic risk
associated with the Focus on core Strategic risk
Intention to adopt SaaS competencies Security risk
Access to specialized Managerial risks
resources
Quality improvements
Liu et al. (2012) Mobile Investigated the mobile Single dimension Financial risk
payment payment adoption based Privacy risk
on the risks-benefits Psychological risk
analysis
Melewar et al. Online group Investigated perceived Price benefit Financial risk
(2013) shopping benefits, perceived risks, Convenience benefit Psychological risk
and trust Recreational benefit Product risk
Time risk
Lee, Park and Social network Investigated benefit and Self-clarification Security risk
Kim (2013) service (SNS) risk factors influencing Social validation Stigma risk
Intention to share Relationship Face risk
information in SNS development Relational risk
Social control Role risk
Self-presentation
Farivar and Social Analyzed users’ social Social benefit Social risk
Yuan (2014) commerce network usage using Commerce benefit Commerce risk
Table I. benefits, risks and trust
Benefit-risk Abramova and Bitcoin Explored drivers and Transaction process, Financial losses
framework of Böhme (2016) inhibitors of Bitcoin use Security and control Legal risk
IT service Decentralization Operational risk
adoption and usage Adoption risk
adopting software as a service (SaaS), perceived by IT executives from adopter and Users willing
non-adopter firms. In this study, they proposed five types of benefits (i.e. cost advantage, or hesitant to
strategic flexibility, focus on core competencies, access to specialized resources, and quality use Fintech
improvements) and five types of risks (i.e. performance, economic, strategic, security, and
managerial risks) associated with SaaS adoption.
Lee, Park and Kim (2013) investigated the benefit and risk factors that influence the
intention to share information on a social network service and determined that users’ 545
behavior would maximize their benefits and minimize their risks in the process. This
study suggested five types of benefits (i.e. self-clarification, social validation, relationship
development, social control, and self-presentation) and five types of risks (i.e. security risk,
stigma risk, face risk, relational risk, and role risk) related to context information sharing.
Farivar and Yuan (2014) proposed a theoretical model to analyze users’ social network
adoption behavior, considering the perceived benefits, perceived risks, and trust from the
benefit-risk framework. They adopted two positive factors (i.e. social and commerce
benefits) as perceived benefits and two negative factors (i.e. social and commerce risks) as
perceived risks. Abramova and Böhme (2016) explored the drivers and inhibitors of
Bitcoin use. They suggested a benefit-risk framework integrated with a technology
acceptance model to explain the use of Bitcoin. Three components of perceived benefits
(i.e. seamless transaction, security and control, and decentralization) and four components
of perceived risks (i.e. financial losses, legal risk, operational risk, and adoption risk) were
included in their study.
2.3 Early adopters vs late adopters

The speed of diffusion of a new IT service depends not only on the characteristics of the IT
itself, but also on the characteristics of the users to whom it is directed (Escobar-Rodríguez
and Romero-Alonso, 2014). For Fintech, individual differences have been generally expected
to be related to the use of Fintech, because interests in individual differences result in
different perceptions of benefits and risks. Understanding the distinction between the
different users can help Fintech companies better understand the characteristics of each
user group to effectively deliver services, while meeting users’ expectations and demands,
thereby improving the continuous use of Fintech.
Based on users’ innovativeness, Rogers (1995) has proposed five distinct adopter
categories: innovators (those who are venturesome), early adopters (opinion leaders who are
widely respected in their social circle), early majority (those who are deliberate), late
majority (those who are skeptical about the value of the innovation), and laggards
(those who are traditional). Kim et al. (2010) chose to use only two categories: early adopters
and late adopters. Early adopters adopt an innovation, even if the uncertainty surrounding
its potential use is high and the benefits of the innovation are not widely visible or accepted.
On the other hand, late adopters are resistant to change, because they want to be certain that
the innovation does not fail before they adopt it (Rogers, 1995).
User differences result in a variety of needs and expectations for adopting and using an
innovation. Jahanmir and Lages (2016) asserted that researchers and practitioners should
target both early adopters and late adopters to increase the success likelihood of the products
or services, because the late adopters of current services are likely to become the early
adopters of the next generation of services. Accordingly, comparing the characteristics of
early and late adopter groups is critical to understanding the willingness or hesitance to use
Fintech. In this study, two Fintech user type categories are considered: early and late adopters.
3. Research model and hypotheses

This study proposed a framework of benefit and risk by integrating the positive and
negative factors related to the Fintech usage decision. Previous studies applied the
IMDS multi-behavioral belief constructs to determine the overall perceived benefit and risk, as well
118,3 as the subsequent continuance intention of Fintech. Three major factors of perceived benefit
were discussed: economic benefit, seamless transaction, and convenience. Four major
factors of perceived risk were illustrated: financial risk, legal risk, security risk, and
operational risk. Consequently, this study assumed that positive and negative factors
influence the overall perceived benefit and risk, which significantly affect the Fintech
546 continuance intention. This study also hypothesized that different Fintech user types
(i.e. early adopters and late adopters) have various expected benefits and risks. The
proposed model is summarized in Figure 1.
3.1 Benefit-risk framework for the continuous use of Fintech

The TRA is a well-researched intention theory that postulates that attitudes toward a
behavior are accurate predictors of individual intentions (Ajzen and Fishbein, 1977; Benlian
and Hess, 2011). The Fintech’s continuous intention is determined by Fintech users’ overall
attitudinal appraisal of Fintech use by applying the TRA to the Fintech context. It is known
that users compare available services and choose a service, or services, with the best value
(Kim et al., 2008). When users make a risky decision, they are willing to take risks to reap
gains or benefits.
Perceived benefits have been widely used as a direct determinant of particular IS
continuous intentions (Kim et al., 2008; Lee, Park and Kim, 2013; Melewar et al., 2013).
A perceived benefit is defined as “a users’ perception of the potential that Fintech use will
result in a positive outcome” in this study. Previous studies have indicated that perceived
benefits can positively influence users’ intention to use IT services for different applications
(Abramova and Böhme, 2016; Benlian and Hess, 2011; Farivar and Yuan, 2014; Lee, Park
and Kim, 2013; Lee, 2009; Lee, Chae and Cho, 2013). A mobile payment study revealed that
perceived benefits can significantly affect mobile payment use (Liu et al., 2012). Likewise,
Abramova and Böhme (2016) indicated that perceived benefits have a positive influence on
Bitcoin use.
Economic
benefit H3
User type
Seamless H4 Perceived
transaction benefit H1
H5 H10
Convenience
Fintech
H11 continuance
Financial
intention
risk H6
Legal H7
risk Perceived H2
H8 risk
Security
risk
H9
Figure 1. Operational
Research model risk
Perceived risks associated with a product or service has gained significance in the consumer Users willing
and innovation research. A perceived risk is a fundamental barrier for users considering or hesitant to
Fintech usage. This study defines the perceived risk as “a users’ perception of the uncertainty use Fintech
and the possible negative consequences regarding the Fintech use.” In the IS literature,
perceived risks negatively affect the intentions to use IT services (Abramova and Böhme,
2016; Benlian and Hess, 2011; Farivar and Yuan, 2014; Lee, Park and Kim, 2013; Lee, 2009;
Lee, Chae and Cho, 2013). Abramova and Böhme (2016) revealed that multi-faceted perceived 547
risk can significantly and negatively influence Bitcoin use.
Based on the theoretical underpinnings and empirical evidence of the literature review, this
study hypothesizes that users’ perceived benefit and risk play significant roles in the forming
of the intention to continuously use Fintech. The perceived benefit has a positive influence on
the Fintech continuance intention, while the perceived risk has a negative influence on such an
intention. Consequently, the following hypotheses are developed:

H1. Perceived benefit is positively related to Fintech continuance intention.
H2. Perceived risk is negatively related to Fintech continuance intention.
3.2 Benefit factors for the continuous use of Fintech

Users’ motivations have been classified as extrinsic and intrinsic factors from the cognitive
evaluation theory (Davis et al., 1992). Extrinsic motivation refers to the performance of an
activity to achieve a specific goal (e.g. rewards), while intrinsic motivation refers to the
performance of an activity for no apparent reinforcement other than the process of
performing the activity by itself (Davis et al., 1989). Both extrinsic and intrinsic factors
have been found to influence perceived benefits and behavioral intentions in the IS
literature. This study focused on the extrinsic motivation factors, because Fintech users
tend to use Fintech for their utilitarian benefits, not for their hedonic benefits. For this
reason, this study proposed three extrinsic motivations as the benefit components of the
overall perceived benefit: economic benefit, seamless transaction, and convenience.
Economic benefit is the most common and consistent extrinsic motivation for Fintech
(Kuo-Chuen and Teo, 2015). In the context of Fintech, the economic benefit includes cost
reductions and financial gains from Fintech transactions. Some Fintech applications
(e.g. mobile remittance or P2P lending) may suggest lower transaction costs to users than
traditional financial service providers by directly providing standardized services on a
mobile channel without intermediation (Mackenzie, 2015). Other Fintech applications
(e.g. P2P lending, crowdfunding), that generally offer services online or via a mobile
platform, might also provide higher returns to lenders, and lower interest rates to borrowers,
than traditional financial institutions by using a match-making platform with a lower
overhead cost (Gerber et al., 2012; Lee and Lee, 2012).
A seamless transaction refers to the transaction-related benefit of using Fintech
(e.g. buying, money transferring, lending, and investing). The seamless transaction process
is an essential characteristic of Fintech transactions that eliminates traditional financial
institutions (e.g. banks) through the finance process. It allows users to manage transactions
on cost effective platforms, resulting in simple and speedy financial transactions (Chishti,
2016; Zavolokina et al., 2016a). Furthermore, non-financial providers (i.e. IT companies) can
create and offer new, innovative and customer-friendly financial products and services to
users because they directly provide their products and services through the seamless
transaction. The seamless transaction induces that Fintech companies can develop new and
innovative financial products and services to compete against traditional financial
institutions and survive in the finance market. Thus, these Fintech companies are reshaping
the business ecosystems of the financial services industry.
IMDS Convenience is one of the extrinsic motivations of Fintech, which is driven by portability
118,3 and immediate accessibility (Kuo-Chuen and Teo, 2015; Sharma and Gutiérrez, 2010).
Convenience refers to flexibility in time and location (Okazaki and Mendez, 2013), the most
important factor in the success of online and mobile services (Kim et al., 2010). Users may
acquire unprecedented convenience and efficiency via mobile devices without traveling to
financial institutions. Shen et al. (2010) suggested that convenience might be useful as a
548 valid predictor of the use of mobile banking systems. Given mobile devices are critical
channels in Fintech, as compared to traditional financial service providers, convenience
through mobile platforms is a plausible reason to determine the perceived benefit of the
intention to use Fintech. Economic benefit, seamless transaction, and convenience might
affect the overall perceived benefit of Fintech, thus affecting its Fintech continuance
intention. As such, this study has the following hypotheses:
H3. Economic benefit is positively related to perceived benefit.

H4. Seamless transaction is positively related to perceived benefit.
H5. Convenience is positively related to perceived benefit.
3.3 Risk factors for the continuous use of Fintech

Besides its perceived benefits, innovation usually comes with risks (Schierz et al., 2010).
As Fintech is an emerging and unprecedented service, Fintech users are vulnerable to
far-reaching risks. For Fintech, the risk of the likelihood of inadequate or failed operations is
very problematic for the continuous use of Fintech. We used the perceived risk framework
developed by Cunningham (1967) to derive the individual risk factors influencing the overall
perceived risk of Fintech (Cunningham, 1967). Cunningham (1967) categorized perceived
risk into six dimensions: performance, financial consideration, opportunity/time, safety,
social factors, and psychological factors. When transferring the Cunningham (1967)
framework to the Fintech context, this study developed the following four types of risks as
perceived risk factors: financial risk, legal risk, security risk, and operational risk.
Financial risk refers to the potential financial loss in the financial transactions of Fintech
(Forsythe et al., 2006). Prior research studies in the IS literature have found that perceived
financial risk is the most consistent predictor of online and mobile user behavior (Abramova
and Böhme, 2016; Benlian and Hess, 2011; Melewar et al., 2013). The financial losses of Fintech,
caused by the malfunction of the financial transaction system, financial fraud, moral hazard,
and extra transaction fees associated with the initial adoption price (World Economic Forum
(WEF), 2015; Zavolokina et al., 2016b), are negatively related to the intention of continuous use.
Legal risk refers to an unclear legal status and the lack of universal regulations for
Fintech. For example, Korean government aggressively intervenes in the management of
Korean financial institutions and financial market because Korean government considers
financial services as public services. Thus, Korea has strict financial regulations that can
strongly hinder the entry and growth of Fintech businesses. It makes users reluctant to use
Fintech. As Fintech is unprecedented in the market, the lack of regulations regarding the
financial loss and security issues of Fintech has resulted in users’ distrust and anxiety.
Security risk is defined as the potential loss due to fraud or a hacking that compromises
the security of the financial transactions of Fintech. In the context of electronic services,
security risk is conceptualized as the likelihood of a privacy invasion; this is a critical
concern among consumers (Lwin et al., 2007). Fraud and hacker intrusions can lead to users’
monetary loss and violate users’ privacy, which is a major concern of many online and
mobile users (Lee, 2009). The use of Fintech is associated with a relatively high loss potential
(i.e. privacy, personal data, transactions) (Schierz et al., 2010); this also increases the
perceived risk of Fintech.
Operational risk is a critical barrier for users, since many major operational losses have Users willing
hit large financial institutions, leading to the severe financial disturbance or collapse of these or hesitant to
institutions (e.g. Lending Club). Operational risk refers to the potential loss due to use Fintech
inadequate or failed internal processes, employees and systems (Barakat and Hussainey,
2013). If the risk likelihood of Fintech companies’ financial systems and operations is high,
users will not continue to use Fintech. Lack of operational skills and immediate responses,
the malfunction of systems, and inadequate internal processes will result in users’ distrust 549
and dissatisfaction, leading to the hindrance of Fintech usage.
Due to the perceived risks (e.g. financial loss, security issues, the absence of
regulations), users will make usage decisions based on the good reputation of Fintech
companies in terms of operational skills and advanced systems. Consequently, the four
types of risks might significantly affect the overall perceived risk of Fintech, thus
negatively influencing the continuance intention of Fintech. Consequently, this study

proposes the following hypotheses:
H6. Financial risk is positively associated with perceived risk.
H7. Legal risk is positively associated with perceived risk.
H8. Security risk is positively associated with perceived risk.
H9. Operational risk is positively associated with perceived risk.
3.4 Moderating effect of user type

The diffusion speed of a new technology not only depends on the characteristics of that
technology, but also on the characteristics of users. Karahanna et al. (1999) noted that the
model used to test the impact of different users on IS usage may reveal novel insights.
Since users would adopt and use new services or technologies at different time periods and
degrees, this study classified Fintech users as early adopters and late adopters, based on the
responses to the new technology (Kim et al., 2010).
Consistent with the previous empirical studies (Escobar-Rodríguez and Romero-Alonso,
2014; Hong and Zhu, 2006; Kim et al., 2010), early adopters are referred to as individuals who
are interested in adopting new technologies or services and are willing to take a risk. On the
other hand, late adopters are referred to as people who are more reserved in adopting new
technologies or services and are skeptical about the adoption. Early adopters function as
opinion leaders who encourage others to adopt and use an innovation by providing evaluative
information (Rogers, 1995). They make critical decisions on adoption, even though the benefits
and losses have not been clearly defined yet (Harrison and Waite, 2006). Late adopters are
resistant to change. They are also suspicious of the agents of change (Escobar-Rodríguez and
Romero-Alonso, 2014). Late adopters want to be certain that the innovation and benefits of
novel products or services will not fail before adopting them (Rogers, 1995).
Customers in the financial sector are more conservative in adopting new technologies
than those in other sectors, because of the specific characteristics of the financial sector
(i.e. the significance of structural assurance, trust in financial transactions and trust in
vendors). Thus, the innovation diffusion process in the financial sector is slower than in the
other sectors, which is difficult to create innovative financial services, despite the many
transaction process evolutions using IT in the financial sector (Zavolokina et al., 2016a, b).
Hence, distinctions between early and late adopters in financial sector are more significant
than that in other sectors. Comparing the characteristics of early and late adopters can
provide researchers and practitioners with valuable insight.
Escobar-Rodríguez and Romero-Alonso (2014) indicated that early adopters are more
willing to adopt and use new information technologies. They also have a more positive
IMDS attitude toward IT innovation than late adopters. Late adopters are reluctant to actively use
118,3 new information technologies. They have a negative attitude about adopting and using new
services with technology. Early adopters expect that the benefit of Fintech usage is greater
than the risk, whereas late adopters perceive the risk of Fintech usage as greater than its
benefit. As a result, the following hypotheses have been developed:
H10. The effect of perceived benefit on Fintech continuance intention in early adopters is
550 greater than in late adopters.
H11. The effect of perceived risk on Fintech continuance intention in late adopters is
greater than in early adopters.
4. Research methodology
4.1 Measurement
To achieve content validity, the measurement items were developed based on the intensive
literature review. Comprehensive multiple-item measures were developed based on previous
innovation and the IS literature to measure three benefit factors (i.e. economic benefit,
convenience, and seamless transaction), four risk factors (i.e. financial risk, legal risk,
security risk, and operational risk), perceived benefit, perceived risk, and continuance
intention of Fintech. Before conducting the main survey, a pre-test was performed to
examine the reliability and validity of the instruments. The pre-test involved 30 respondents
who had experience using Fintech. The pre-test results led to a significant refinement and
restructuring of the questionnaire. The initial face and internal validity of the measures
were also established. The measures were evaluated with a seven-point Likert-type scale,
ranging from (1) “extremely low” to (7) “extremely high”. The structure of the measurements
used and the relevant studies are shown in the appendix.
4.2 Sample and data collection

The data collection process was outsourced to Embrain Co. (www.embrain.com), a large
market research company in Korea with more than 1.8 million panels in various Asian
countries. For our main survey, the company first sent e-mail invitations to the targeted
panels. If they accepted the offer to participate, they were guided to websites built by us.
The invitation continued until 1,000 panels accepted the offer. Embrain has a solid reputation
for managing panels for data authenticity. The company carefully selected participants from a
pool of panels based on the specific requests of clients. The company also maintains a record
of respondents to control panel integrity. If inconsistency was detected during a response in
the panel, the data from that panel were discarded and the respondent was excluded from the
panel pool (i.e. company policy on spurious panels). Respondents who had Fintech usage
experience were asked to respond to the entire questionnaire. To ensure that the respondents
fully understood the survey context, an initial screening question was asked to determine if
they were currently using Fintech. The four types of Fintech used were mobile payment,
mobile remittance, P2P lending, and crowdfunding. If the respondents responded negatively
to the question, they were not allowed to participate in the survey.
A total of 265 responses were received, of which 21 were classified as outliers and
eliminated. Finally, 243 responses were used in this study, indicating a usable response
rate of 24.3 percent. Table II summarizes the characteristics of the respondents.
The distribution of the response, according to the four types of Fintech, included: mobile
payment (28.4 percent); mobile remittance (27.2 percent), crowdfunding (24.7 percent),
and P2P lending (19.8 percent). In terms of the age and education distribution, the
sample had a significantly larger proportion of users aged 40-49 years (29.2 percent).
Overall, 60.5 percent of respondents had a bachelor’s degree. Table II illustrates that most
Division Freq. Percent Division Freq. Percent
Users willing
or hesitant to
Gender Fintech type use Fintech
Male 112 46.1 Mobile payment 69 28.4
Female 131 53.9 Mobile remittance 66 27.2
Total 243 100 P2P lending 48 19.8
Fintech users 551
Early adopters 161 33.7 Crowdfunding 60 24.7
Late adopters 82 66.3 Total 243 100
Total 243 100
Age Period of use
Under 20 0 0 ~3 month 88 36.2
20~29 55 22.6 ~6 month 57 23.5

30~39 60 24.7 ~12 month 40 16.5
40~49 71 29.2 ~18 month 11 4.5
50 over 57 23.5 ~24 month 18 7.4
Total 243 100 24 month over 29 11.9
Total 243 100
Education Frequency of use
Under high school 1 0.4 Daily 3 1.2
High school 26 10.7 Weekly 64 26.3
College/associate 39 16.0 Monthly 89 36.6
Bachelor 148 60.5 Every 3 month. 43 17.7
Master 25 10.7 Every 6 month. 22 9.1
PhD 4 1.6 Once 1 year or less 15 6.2
Total 243 100 Once 2 year or less 7 2.9 Table II.
Total 243 100 Sample characteristics
respondents had Fintech experience within one year (76.2 percent) and used Fintech
monthly and weekly (36.6 and 26.3 percent, respectively). Most mobile payment and
mobile remittance users applied Fintech weekly or monthly, whereas most P2P lending
and crowdfunding users applied Fintech monthly or every six months. The average
interval of using P2P lending and crowdfunding was longer than that of using mobile
payment and mobile remittance.
Before the final analysis, the common method variance (CMV ) was evaluated.
To manage the CMV and improve data quality, three analyses were conducted to test the
effect of the CMV. The first analysis was a Harman’s single factor test. If the CMV was a
serious issue in the collected data, either a single factor emerged from a factor analysis or
one general factor account for a majority of the covariance. A factor analysis was
conducted for all of the items. The results validated that eight factors were extracted
with an eigenvalue that was greater than 1 and no general factor was apparent in the
unrotated factor structure, indicating no excessive CMV. The second analysis was a
partial correlation, following Podsakoff and Organ (1986). More specifically, a partial
least squares (PLS) model was applied. The PLS included the highest factor from the
principle component factor analysis as a control variable on one dependent variable.
This factor did not produce change in the variance explained in one dependent
variable, suggesting no existence of a significant CMV. The third and final analysis was a
single-method factor analysis. It was conducted by using the indicators to measure the
theoretical constructs and re-running the structural model, following Podsakoff et al.
(2003). The results did not change. All of these tests validated that common method bias is
not a major concern in this study.
IMDS 5. Analysis and results
118,3 In this study, the PLS method was chosen to examine the proposed model and its
hypotheses for several reasons. The PLS is recommended for predictive research models,
with emphasis on theory development (Fornell and Bookstein, 1982). Given that this study
was an initial attempt to advance a theoretical model that determines the benefit and
risk factors influencing Fintech behavioral intentions, PLS was chosen due to its
552 appropriateness for exploratory science (Chin, 1998).
Gefen et al. (2000) have recommended that a two-stage analytical process should be
employed for a data analysis. The measurement model was first assessed to determine how
the observed items were loaded on the constructs in the model. The assessment of the
structural model could allow for hypothesis testing by examining the relationships among
the constructs. A Smart PLS Version 3.00 was used for analyzing the measurement and
structural models.
5.1 Measurement model

To validate our measurement model, three types of validity were assessed: content,
convergent, and discriminant. First, content validity refers to the representativeness
and comprehensiveness of the items used to create a scale. It is assessed by examining the
process by which scale items were generated. The content validity of the instrument
was established by ensuring consistency between the measurement items and
the extant literature by conducting several rounds of pre-tests and pilot tests for the
newly developed measures. After following this process, our scales were found to
be content-valid. Second, convergent validity was assessed using Cronbach’s α, the
composite reliability and the average variance extracted (AVE) for each construct
(Barclay et al., 1995). As shown in Table III (a), Cronbach’s α and the composite reliability
values were higher than the recommended level (0.7). The AVE values of our measures
were higher than 0.5, thus supporting convergent validity. Finally, the discriminant
validity of our instrument was verified by the square root of the AVE. As shown in
Table III (b), the results revealed that the square root of the AVE of every construct
on the measurement model was greater than the correlation with the other constructs.
The results of the inter-construct correlation revealed that each construct shared
a larger variance with its measures than with the other measures. Overall, the
measurement model was strongly supported by the gathered data and was suitable
for further analysis.
The multicollinearity of all of the variables was assessed using variance inflation factors
(VIFs). Multicollinearity may potentially exist among the independent variables. Our results
revealed that the VIF values for the variables were acceptable, ranging from 1.458 to 1.884
(Petter et al., 2007). Such results of the VIF test and the correlation indicated that
multicollinearity was not a serious issue with the research model proposed in this study,
particularly if the purpose of the analysis was to make inferences on the response functions
or predictions of new observations (Neter et al., 1985).
5.2 Structural model

5.2.1 Hypotheses tests. With an adequate measurement model and a suitably low level of
multicollinearity, all proposed hypotheses were tested with the PLS. The path coefficients,
t-values and R2 were used to test the structural model (Figure 2). The tests of significance
of all of the paths in the research model were conducted using the PLS bootstrap
resampling procedure. As shown in Figure 2, all paths within the model were supported at
the 0.01 level. The proposed model accounted for 39.7 percent of the variance in the
Fintech continuance intention.
Composite
Construct Item Cronbach’s α reliability Average variance extracted Loading t-statistic
(a) Assessment of reliability and validity

Perceived benefit PB1 0.786 0.862 0.610 0.723** 13.300
PB2 0.789** 26.737
PB3 0.814** 23.957
PB4 0.795** 29.700
Perceived risk PR1 0.749 0.857 0.666 0.741** 14.580
PR2 0.855** 37.874
PR3 0.847** 28.848
Economic benefit EB1 0.864 0.919 0.787 0.921** 82.325
EB2 0.939** 108.831
EB3 0.800** 18.012
Seamless transaction ST1 0.806 0.889 0.723 0.889** 54.775
ST2 0.885** 48.434
ST3 0.695** 16.697
Convenience CV1 0.905 0.941 0.841 0.893** 54.659
CV2 0.931** 87.252
CV3 0.929** 113.125
Financial risk FR1 0.793 0.878 0.707 0.755** 13.660
FR2 0.882** 42.370
FR3 0.883** 39.507
Legal risk LR1 0.878 0.916 0.732 0.819** 30.075
LR2 0.888** 60.567
LR3 0.877** 34.121
LR4 0.830** 22.135
Security risk SR1 0.912 0.944 0.850 0.910** 52.417
SR2 0.930** 86.674
SR3 0.920** 72.954
Operational risk OR1 0.858 0.916 0.778 0.885** 44.707
OR2 0.903** 63.689
OR3 0.864** 40.150
(continued )
use Fintech
553
or hesitant to
Users willing
Results of the
measurement model
Table III.
analysis
554
118,3
IMDS
Table III.
Composite
Construct Item Cronbach’s α reliability Average variance extracted Loading t-statistic
Continuous intention CI1 0.901 0.931 0.770 0.853** 16.971

CI2 0.886** 35.796
CI3 0.897** 51.822
CI4 0.871** 41.024
Construct Means (SD) 1 2 3 4 5 6 7 8 9 10
(b) Correlations and square root of AVE
Perceived benefit 5.109 (0.864) 0.781
Perceived risk 3.894 (1.005) −0.301 0.816
3. Economic benefit 4.838 (0.974) 0.616 −0.234 0.887
4. Seamless transaction 4.764 (0.945) 0.580 −0.317 0.510 0.850
5. Convenience 5.266 (0.969) 0.647 −0.364 0.572 0.589 0.917
6. Financial risk 4.203 (0.928) −0.222 0.539 −0.184 −0.179 −0.180 0.841
7. Legal risk 3.974 (0.912) −0.192 0.510 −0.106 −0.142 −0.242 0.493 0.856
8. Security risk 4.609 (1.089) −0.056 0.251 −0.101 −0.016 0.020 0.471 0.270 0.922
9. Operational risk 4.329 (0.922) −0.132 0.307 −0.081 −0.123 −0.123 0.364 0.402 0.623 0.882
10. Continuance intention 4.718 (0.869) 0.528 −0.285 0.383 0.506 0.562 −0.214 −0.226 −0.236 −0.302 0.878
Notes: Numbers in the grayed diagonal represent each construct’s square root of average variance extracted. **p o 0.01
Economic 0.363***
Users willing
benefit (17.127) or hesitant to
0.361***
use Fintech
Seamless (16.666) Perceived
transaction benefit
0.548***
(9.703)
Convenience
0.460***
(16.923)
2
R = 0.538 555
Fintech
continuance
Financial
intention
risk 0.272***
(12.554)
R 2 = 0.397
0.366***
Legal (10.366) –0.223***
risk Perceived
(4.258)
risk
Security 0.344***
risk (12.726) R 2 = 0.388
0.330***
Operational (12.279) Figure 2.
risk Results of
hypotheses tests for
the total group
Notes: *p < 0.10; **p < 0.05; ***p < 0.01
Figure 2 shows that the perceived benefit had a significant positive effect on the Fintech
continuance intentions ( β ¼ 0.548, p o0.01). Thus, H1 was supported. The perceived risk
was negatively related to the Fintech continuance intention ( β ¼ −0.223, p o0.01),
providing support for H2. The perceived benefit positively affected the respondents’
willingness to continuously use Fintech, whereas the perceived risk negatively influenced
such willingness. The results also revealed that the effect of the perceived benefit was
greater than that of the perceived risk. This indicates that the respondents were willing to
use Fintech in Korea, in general.
The economic benefit, seamless transaction, and convenience had significant positive
effects on the perceived benefit ( β ¼ 0.363, po 0.01; β ¼ 0.361, p o0.01; β ¼ 0.460, p o0.01),
supporting H3, H4, and H5, respectively. The path coefficient between the convenience and
the perceived benefit was greater than the causal relationships between the economic
benefit, or seamless transaction, and the perceived benefit. The path coefficient between the
economic benefit and the perceived benefit was nearly similar to the result between
the seamless transaction and the perceived benefit.
The results also showed that the financial, legal, security, and operational risks had
significantly positive effects on the perceived risk ( β ¼ 0.272, po0.01; β ¼ 0.366, po0.01;
β ¼ 0.344, po0.01; β ¼ 0.330, po0.01), providing support for H6, H7, H8, and H9,
respectively. The highest loading of legal risk indicated that it had the strongest impact on the
perceived risk, whereas the financial risk had the lowest impact. The effect of the security risk
was greater than that of the operational risk on the perceived risk. The proposed model
accounted for 39.7 percent of the variance in the Fintech continuance intentions.
5.2.2 Moderation test of Fintech user types. Fintech users were classified into two types,
early adopters and late adopters based on the responses to the new technology. The respondents
were asked to choose the one statement that best described them (Kim et al., 2010). Based on their
responses, the respondents were classified into one of the two user types, as shown in Table IV.
IMDS The results of our user classification revealed that 66.3 percent of respondents were
118,3 identified as early adopters, while 33.7 percent of respondents were identified as late
adopters. To investigate the differences in the demographic characteristics between the two
user groups, the age and education level were analyzed. Table V illustrates that the early
adopters had the following age distribution: 40-49 years (26.7 percent), 30-39 years
(24.8 percent), 20-29 years (24.2 percent), and ⩾50 years (24.2 percent). Regarding education
556 level, 59.0 percent of early adopters had a bachelor’s degree, 11.2 percent had a master’s
degree, 2.5 percent had a PhD degree, and 0.6 percent did not graduate from high school.
The late adopters had the following age distribution: 40-49 years (34.1 percent), 30-39 years
(24.4 percent), ⩾50 years (22.0 percent), and 20-29 years (19.5 percent). Regarding education
level, 63.4 percent of late adopters had a bachelor’s degree, while 22.0 percent were
college/associate degree graduates. The characteristics of the two groups were consistent
with the overall sample characteristics. The differences in the age and education level
between the two groups was not statistically significant (age: t ¼ 0.516, p ¼ 0.606; education
level: t ¼ 0.356 p ¼ 0.724). Based on these observations, individual differences and Fintech
characteristics were further analyzed.
Each group underwent measurement model tests, such as exploratory factor analysis
and multicollinearity. Figures 3 and 4 show the results of the moderation test of the Fintech
user type. As shown in Figures 3 and 4, the relative importance of the benefit and risk
factors varied, depending on the user types. The effects of the perceived benefit and risk on
the Fintech continuance intention were only significant in the early adopter group.
The effect of the perceived benefit ( β ¼ 0.656, p o0.01) on the continuance intention of the
early adopters was significant, while that of the late adopters was not significant.
User type Statement Reference
Early adopter I am willing to take risk Kim et al. (2010)

I am interested in new technology
I tend to be first in using new products and services
Table IV. Late adopter I am hesitant to take risk Kim et al. (2010)
Fintech user I still worry about new technologies
classification I tend to continue using existing products and services
Division Early adopters Late adopters Division Early adopters Late adopters
Gender Fintech type

Male 77(47.8) 35(42.7) Mobile payment 44(27.3) 25(30.5)
Female 84(52.2) 47(57.3) Mobile remittance 50(31.1) 16(19.5)
Total 161(100) 82(100) P2P lending 28(16.8) 21(25.6)
Crowdfunding 40(24.8) 20(24.4)
Total 161(100) 82(100)
Age Education
Under 20 0(0) 0(0) Under high school 1(0.6) 0(0)
20~29 39(24.2) 16(19.5) High school 22(13.7) 4(4.9)
30~39 40(24.8) 20(24.4) College/associate 21(13.0) 18(22.0)
40~49 43(26.7) 28(34.1) Bachelor 95(59.0) 52(63.4)
Table V. 50 over 39(24.2) 18(22.0) Master 18(11.2) 8(9.8)
Characteristics of Total 161(100) 82(100) PhD 4(2.5) 0(0)
Fintech users Total 161(100) 82(100)
Economic 0.356***
Users willing
benefit (13.802) or hesitant to
0.367*** use Fintech
transaction benefit
R 2 = 0.565
Convenience
0.449***
(14.817)
0.656***
(12.120)
557
Fintech
Financial continuance
risk 0.261*** intention
(10.313)
R 2 = 0.514
0.413***
Legal (12.871) –0.175**
(3.055)
risk Perceived
risk
Security 0.309***
risk (11.882) R 2 = 0.475
0.310***
risk Results of hypotheses
tests for the
early adopters
Notes: *p < 0.10; **p < 0.05; ***p < 0.01
Economic 0.381***
benefit (3.180)
0.343***
transaction benefit
Convenience 0.530*** R 2 = 0.486 0.220

(5.634) (1.218)
Fintech
continuance
Financial
intention
risk 0.288***
(5.101)
0.162*
R 2 = 0.139
Legal (1.593) –0.309*
(1.870)
risk Perceived
risk
Security 0.441***
risk (6.695)
R 2 = 0.371
0.388***
risk Results of hypotheses
tests for the
late adopters
Notes: *p < 0.10; **p < 0.05; ***p < 0.01
The late adopter group indicated a stronger coefficient path ( β ¼ −0.309, p o0.10) of the
perceived risk than the early adopter group ( β ¼ −0.175, p o0.05). More specifically,
convenience ( β ¼ 0.449, p o0.01) was the most positive factor. This was followed by
seamless transaction ( β ¼ 0.367, p o0.01) and economic benefit ( β ¼ 0.356, p o0.01). Legal
risk had the most negative effect ( β ¼ 0.413, p o0.01). This was followed by operational risk
IMDS ( β ¼ 0.310, p o0.01) and security risk ( β ¼ 0.309, p o0.01) in early adopters. Early adopters
118,3 regarded financial risk as a low risk factor for using Fintech ( β ¼ 0.261, p o0.01).
Regarding late adopters, convenience ( β ¼ 0.530, p o 0.01) had the highest impact on
the perceived benefit. This was followed by the economic benefit ( β ¼ 0.381, p o 0.01) and
seamless transaction ( β ¼ 0.343, p o 0.01). Security risk had the strongest negative effect
( β ¼ 0.441, p o 0.01) on the perceived risk. This was followed by operational risk
558 ( β ¼ 0.388, p o 0.01) and financial risk ( β ¼ 0.288, p o 0.01). Legal risk had no significant
effect on the perceived risk in late adopters. The perceived benefit and risk accounted for
51.4 and 13.9 percent of the variance in Fintech continuance intention between early and
late adopters, respectively.
To statistically verify the differences in the user types, a multi-group comparison with PLS
was conducted (Qureshi and Compeau, 2009). The path coefficients and t-statistics generated
with the PLS between the early and late adopters are summarized in Table VI. A t-test was
conducted to test the significance of the difference between the early and late adopters. The
results showed that there was a significant difference in the effect of the perceived benefit on
the Fintech continuance intentions between the two groups (path coefficient
difference ¼ 0.436, t ¼ 2.872, po0.01), supporting H10. However, there was no difference in
the effect of the perceived risk between the two groups; as such, H11 is not supported.
Moreover, the effect of legal and security risk on the perceived risk also showed a
significant difference between the two groups (path coefficient difference ¼ 0.251, t ¼ 2.924,
p o0.01; path coefficient difference ¼ 0.136, t ¼ 2.187, p o0.05). Overall, our results
indicated that the significance of the benefit and risk factors varied between the early and
late adopters. The early adopters were willing to continuously use Fintech, because they
perceived that its benefits ( β ¼ 0.656, p o0.01) were greater than its risks (β ¼ −0.175,
p o0.05). However, late adopters were skeptical about making a continuous usage decision,
because they perceived that Fintech risks ( β ¼ −0.309, p o0.05) were strong, but not
beneficial. Security risk was the most critical reason for late adopters not to use Fintech.
To further strengthen the validation of the proposed model and the hypotheses, we
conducted an ad-hoc test depending on the Fintech types, because the user motivations are
still diversified. Four Fintech types (i.e. mobile payment, mobile remittance, P2P lending,
and crowdfunding) were employed to better understand the effect of the Fintech
type-specific factors on Fintech usage, which are sufficiently large to be significant. We then
conducted four separate PLS analyses to test each individually. The results of the ad-hoc
test are shown in Table VII.
The effect of the perceived benefit on the continuous use of P2P lending was the highest,
whereas that of crowdfunding was the lowest. The effect of perceived risk was the greatest
Early adopters Late adopters

Relationship Path coefficient t-statistics Path coefficient t-statistics Path coeffi. Diff. t-value p-value
PB → CI 0.656 12.120*** 0.220 1.218ns 0.436 2.782 0.006***

PR → CI −0.175 3.055** −0.309 1.870* 0.134 0.923 0.357
EB → PB 0.356 13.802*** 0.381 3.180*** 0.025 0.252 0.801
ST → PB 0.367 13.196*** 0.343 6.433*** 0.024 0.453 0.651
CV → PB 0.449 14.817*** 0.530 5.634*** 0.081 1.001 0.318
FR → PR 0.261 10.313*** 0.288 5.101*** 0.028 0.511 0.610
Table VI.
Multi-group LR → PR 0.413 12.871*** 0.162 1.593ns 0.251 2.924 0.004***
comparison between SR → PR 0.309 11.882*** 0.441 6.695*** 0.132 2.187 0.030**
early adopters and OR → PR 0.310 11.047*** 0.388 5.439*** 0.078 1.146 0.253
late adopters Notes: ns, not significant. *p o0.10; **p o0.05; ***p o0.01
Path coefficient (t-value)

PB → CI PR → CI EB → PB ST → PB CV → PB FR → PR LR → PR SR → PR OR → PR R2
Mobile
payment
(n ¼ 69) 0.628** (6.501) −0.091ns (0.820) 0.337** (9.074) 0.395** (13.059) 0.430** (13.443) 0.352** (10.085) 0.330** (2.898) 0.331** (4.633) 0.303** (6.132) 41.5
Mobile
remittance
(n ¼ 66) 0.514** (4.968) −0.382** (3.819) 0.360** (7.701) 0.374** (6.946) 0.470** (8.928) 0.301** (8.581) 0.356** (7.454) 0.315** (7.828) 0.277** (8.573) 52.8
P2P lending
ns
(n ¼ 48) 0.741** (9.595) −0.104ns (0.670) 0.317** (2.998) 0.307** (5.872) 0.568** (5.434) 0.102 (1.001) 0.410** (5.770) 0.407** (4.388) 0.348* (2.324) 53.7
Crowdfunding
(n ¼ 60) 0.398** (3.306) −0.316** (2.804) 0.439** (8.126) 0.352** (9.321) 0.401** (12.523) 0.280** (6.105) 0.318** (2.943) 0.362** (5.000) 0.357** (5.699) 31.9
Total (n ¼ 243) 0.548** (10.292) −0.223** (4.252) 0.363** (16.312) 0.361** (16.146) 0.460** (16.846) 0.272** (16.846) 0.366** (10.617) 0.344** (13.064) 0.330** (12.473) 39.1
Notes: ns, not significant. *p o0.5; ** p o 0.01
use Fintech
559
or hesitant to
Users willing
tests between four

types of Fintech
Results of ad-hoc
Table VII.
IMDS on the continuance intention of mobile remittance. There was no effect of the perceived risk
118,3 on the continuance intentions of both mobile payment and P2P lending. These results
indicate that P2P lending and mobile payment users are actively willing to use their Fintech
services. However, the users of mobile remittance are the most concerned about their risk.
The path coefficient difference between the perceived benefit and risk was the smallest in
crowdfunding, but was the biggest in both P2P lending and mobile payment. Meanwhile,
560 convenience was the strongest positive factor of the perceived benefit for all Fintech types,
whereas the most negative factor was different according to each Fintech type.
Specifically, in terms of mobile payment, the effect of seamless transaction was high,
while the effect of financial risk was greater than that of the other risks. The mobile
remittance user group indicated a strong effect of seamless transaction on the perceived
benefit, but the most negative legal risk among the four risk factors. In the user group on
P2P lending, the effect of the economic benefit was an important factor to continuously use
P2P lending. Legal risk was a main reason not to use P2P lending. Financial risk had no
significant impact on the perceived risk in P2P lending. The crowdfunding user group
illustrated that the economic benefit had the highest factor of perceived benefit. Security risk
had the most negative factor of the perceived risk. Positive and negative factors accounted
for 41.5, 52.8, 53.7, and 31.9 percent of the variance in Fintech continuance intentions
between mobile payment, mobile remittance, P2P lending and crowdfunding, respectively.
6. Discussions and implications

6.1 Discussions of findings
Despite superior e-financial services in Korea’s financial industry, the Korean Fintech
business is not widespread, as compared to other countries (e.g. USA, UK, Singapore, and
China) because of the considerable uncertainty of the business environment. As Korea’s
financial sector is traditionally known for its stringent institutional control and high entry
barriers, some financial institutions and IT companies strongly doubt the business potential
of Fintech so they are eager to be convinced of Fintech’s business success. This study tried
to help Fintech companies and financial institutions by putting conviction into the customer
demands for new Fintech services through the investigation of Fintech usage behavior.
The purpose of this study was to determine both positive and negative factors jointly
influencing the continuous use of Fintech. To better understand Fintech usage behavior,
Fintech users were categorized into early and late adopters to investigate user-group level
behavior. Our findings revealed that the perceived benefit and risk significantly influenced
the Fintech continuance intention. However, they were not factored into the decision
intention to the same extent. The results illustrated that the perceived benefit had a much
stronger impact on Fintech usage decision than the perceived risk. This has significant
implications, as benefits are more influential than risks in terms of users’ perception.
Considering a high expected value of Fintech usage, more active development of Fintech
business by IT companies and a more pragmatic approach of institutional control by the
government are needed to meet user demands.
Among the three factors of perceived benefit, convenience was the strongest and most
consistent factor significantly affecting the perceived benefit. Our results indicated that
Fintech users would perceive Fintech usage primarily as a convenience that enables financial
transactions mobility and flexible access. This result is consistent with the results of previous
studies (Kim et al., 2010; Kuo-Chuen and Teo, 2015; Okazaki and Mendez, 2013; Shen et al.,
2010). Fintech may even provide greater convenience by reducing the effort and time that
users invest in conducting financial transactions. However, the Fintech continuance intention
is not solely driven by convenience improvements. Our findings illustrated that seamless
transaction and economic benefit could also drive the Fintech continuance intention.
Of the major risk factors driving the Fintech continuance intention, legal risk was the Users willing
dominant factor. This was followed by security, operational, and financial risks. Fintech users or hesitant to
were mainly concerned about regulation and security issues that might be detrimental to use Fintech
users. For example, the aggressive enforcement of anti-money-laundering statutes and money
transmission regulations are ongoing threats to Fintech businesses. Moreover, stringent
institutional control by the government is also a critical factor that inhibits Fintech businesses.
As such, Fintech companies are struggling to understand the financial act’s rules and 561
regulations and how they apply financial transactions to their services. These situations make
users hesitant to engage in Fintech businesses. It leads users to form a negative attitude
toward using Fintech. Therefore, reforming the regulations and strengthening the security of
financial transactions should be considered to revitalize the Fintech business.
Unlike legal and security risks, the empirical data showed that financial risk had the
weakest effect among the four determinants of perceived risk. This result contradicts
the results of previous studies, showing that financial risk is the most significant factor
of the perceived risk in mobile payment and mobile banking usage (Abramova and Böhme,
2016; Liu et al., 2012; Luo et al., 2010). A possible explanation for this intriguing result is that
users might be more concerned with the other three negative factors: legal, security, and
operational risks. This is because these three factors are preconditions of financial risk.
Noteworthy differences in the specific benefits and risks effect were found between early
and late adopter groups. Convenience had the strongest positive impact on the perceived
benefit, which, in turn, increased the Fintech continuance intention in both groups, although
it was regarded to be more critical in late adopters. The effect of the economic benefit was
the lowest among the three positive factors in early adopters, whereas it was the most
important positive factor in late adopters. The key advantage of using Fintech by early
adopters was not to have economic gains, but rather, seamless transactions; this is a
significant implication for Fintech companies. The results indicate that the early adopters
primarily seek the efficiency of financial transactions, while the late adopters seem to expect
more financial gains through using Fintech.
Interestingly, legal risk had the strongest significant effect on the Fintech continuance
intention of early adopters, although it had an insignificant impact on that of late adopters.
As early adopters usually have preliminary knowledge about the technology and business
environments of Fintech, they might have regarded the regulations applied to the Fintech
business as a key barrier to Fintech usage. However, the late adopters regarded security as
the most critical risk factor among the four negative factors, because they could not
understand the specific legal environment of the Fintech business. Their general thinking
was that Fintech risk was like that of other technological services (e.g. online banking,
online shopping) in the IT industry.
Furthermore, considering the large gap in the perception of security risk between early and
late adopters, the difference between the two groups was significant. A possible explanation is
that early adopters might trust the reliability and stability of the Fintech technologies that they
used (e.g. blockchain technology). However, late adopters might not be sure about the security of
financial transactions by IT companies. In addition, both groups expressed a strong concern
about the effect of the operational risk of the continuous use of Fintech. The results validated
that Fintech users were anxious about the lack of consumer protection and financial losses
resulting from malfunctions or security breaches by service providers’ systems and the process,
regardless of their innovativeness. Therefore, Fintech companies should enhance their
reputation by establishing the stability and trust of their system to attract more Fintech users.
6.2 Theoretical and practical implications

This study revealed several theoretical implications. First, this study attempts to
empirically examine a comprehensive set of perceived benefit and risk in the continuance
IMDS intention towards Fintech, an area of research that has not been addressed in previous
118,3 studies. A more detailed understanding of the continuous use of Fintech in the IS field must
be achieved before more significant progress can be made. Therefore, this study proposed
the benefit-risk framework for the continuous use of Fintech from the IS literature.
Furthermore, the theoretical and empirical validation of the effects of the perceived benefit
and risk for Fintech usage is also a significant research contribution of this study.
562 Second, this study contemplates the specific benefit and risk factors jointly influencing
the Fintech continuance intention. This study reveals specific benefits and risks
contributing to the formation of the continuance intention and the extent to which they
contributed. By using multi-dimensional concepts of benefit and risk, this study observed
the individual effects of the underlying determinants and assessed the overall impact of the
benefit and risk on the Fintech continuance intention. Moreover, this study advances our
understanding of the process of balancing different salient beliefs regarding the benefit and
risk factors prior to the decision-making process, so that the decision-making process of
Fintech usage becomes more transparent and traceable.
Third, this study indicates that the effects of the perceived benefit and risk on the
Fintech continuance intention are different, depending on the user types. The speed of
diffusion of an emerging service with new technologies depends on the characteristics of the
service, as well as the characteristics of the user (Teo et al., 2008). This study focused on the
difference of specific benefit and risk factors influencing the continuous use of Fintech
between early and late adopters. The difference between the benefit and risk factors was
empirically validated. User-specific factors are major contributors to the success of the
Fintech business, which, in turn, leads to better Fintech usage.
This study reveals several practical implications. First, this study highlights that the
perceived benefit is more influential than the perceived risk of the Fintech continuance
intention. The findings also implied that users were willing to continuously use Fintech, in
general, although the considerable risk factors still existed in the market. From the results of
the ad-hoc analysis as shown in Table VII, users perceived high benefits, but no risks in P2P
lending, despite the Lending Club scandal. The interpretation about the strong positive
perception in P2P lending seems to be consistent with the reckless investment craze of
Bitcoin in 2017. Users’ strong positive perceptions of Fintech, without risk perceptions,
might lead to the serious financial trouble of Fintech users in the short term, and the
destruction of Fintech business ecosystems in the long term. Thus, our findings need to be
carefully interpreted. If users simultaneously perceive both the benefits and risks of Fintech,
the users’ decision-making process can work properly and the Fintech business can be
consistently developed and enhanced. For the reason, building a risk-free transaction
environment is much more important than providing benefits to users to enhance Fintech
businesses for the long term. Fintech companies should search for risk-reducing strategies
that may assist in inspiring higher levels of confidence in potential users.
Second, this study provides Fintech managers with valuable insight on the factors they
should emphasize or avoid when marketing Fintech to users. The empirical results revealed
that the three benefit and four risk factors had a significant effect on the behavioral
intention of Fintech. In terms of perceived risks, legal risk had the most negative effect for
the total group. Both early and late adopters considered operation risk to be most crucial
factor in their reluctance to use Fintech. According to our findings, the possible
risk-mitigation strategies of Fintech companies may involve developing detailed contracts
with Fintech users. These contracts may include mandatory security standards
(e.g. blockchain technology), penalties, and compensation for data breaches or non-
performance by a system-caused failure, as well as the inclusion of third parties. The third
parties are responsible for guaranteeing the availability and integrity of the data (e.g. credit
evaluation) and safeguarding users against major risks (e.g. bankruptcy). In terms of
perceived benefits, Fintech companies should make an effort to provide their users with Users willing
economic gains and the efficiency of financial transactions at the same time. This finding is or hesitant to
particularly significant for Fintech managers that need to decide how to allocate resources use Fintech
to retain or expand the current user base. Hence, this study provides valuable practical
guidance to managers to enhance the Fintech continuance intention.
Third, Fintech managers should understand the clear differences between benefit and
risk factors, depending on the user types. Such a distinction can enable Fintech companies 563
to understand the characteristics of each Fintech user and effectively deliver services, while
meeting customer expectations and demands, thereby improving the continuous use of
service. Our findings show that the early adopters mainly focus on the efficiency of financial
transactions, whereas the late adopters seek more financial gains through Fintech usage.
Moreover, the early adopters are concerned about the legal risk, while the late adopters
consider security risk as the most negative factor. Therefore, Fintech companies should
consider their users’ characteristics before the positive and negative factors for Fintech
usage are realized in the market. Our findings will help Fintech companies invest an
appropriate amount of time, effort, and money in the development and provision of Fintech.
6.3 Limitations and future research directions

Despite the previously mentioned contributions, this study has a few limitations, several
of which offer opportunities for future research. First, this study focused on a specific set
of perceived benefits and risks reflecting those used in the previous studies. Future
studies may include other factors of benefit and risk associated with the continuous use of
Fintech that might start to show significance over time. Second, this study did not
incorporate actual usage behavior into the proposed model. However, substantial
empirical support has existed, regarding the causal link between the intention and usage
behavior (Venkateshand Davis, 2000).
Third, due to the innovative nature of Fintech and its infancy stage of implementation,
this study focused on behavioral intention, as a dependent variable, to interpret the
theory-driven behavior in the early adoption stage. Measurement reliability needs to be
improved in future research by applying additional methods (e.g. field studies, longitudinal
analysis) to more closely observe and investigate the differences between early and late
adopters in the later stages of Fintech implementation. Fourth, the respondents of this study
were limited based on four types of Fintech: mobile payment, mobile remittance, P2P
lending, and crowdfunding. Therefore, our findings might not be applicable to other Fintech
applications (e.g. Bitcoin, Ethereum, internet insurance, personal financing, equity
financing, retain investment, Fintech tool and software). Hence, future research is needed
to extend this investigation to other Fintech services.
Finally, our findings might not be applicable, in a general sense, to future studies,
because our sample was restricted to Korea, with different national characteristics,
compared to other Fintech technology advancing nations (e.g. USA, UK, China, and
Singapore). Therefore, the results of this study must be cautiously interpreted. Future
studies considering national characteristics are needed to explain the issue of Fintech usage
across different nations at the individual level.
Note
1. P2P lending refers to a type of financial transactions directly occurring between lenders and
borrowers without intermediation of a traditional financial institution (Lee and Lee, 2012), whereas
crowdfunding is an open call on the internet for financial resources in the form of a monetary
donations, in exchange for a future product, service, or reward (Gerber et al., 2012).
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(The Appendix follows overleaf.)

IMDS Appendix
118,3
Constructs Questionnaire Reference
Perceived PB1. Using Fintech has many advantages. Kim et al. (2008), Benlian
568 benefit (PB) PB2. I can easily and quickly use Fintech. and Hess (2011)
PB3. Using Fintech is useful for me.
PB4. Using Fintech yields a more superior outcome quality
than traditional financial services.
Perceived risk PR1. Using Fintech is associated with a high level of risk. Kim et al. (2008), Benlian
(PR) PR2. There is a high level of uncertainty using Fintech. and Hess (2011)
PR3. Overall, I think that there is little benefit to use Fintech

compared to traditional financial services.
Economic EB1. Using Fintech is cheaper than using traditional Featherman and Pavlou
benefit (EB) financial services. (2003), Lee (2009)
EB2. I can save money when I use Fintech.
EB3. I can use various financial services with a low cost when I
use Fintech.
Seamless ST1. I can control my money without the middleman when I Chishti (2016)
transaction use Fintech.
(ST) ST2. I can use various financial services at the same time
(e.g. one stop processing) when I use Fintech.
ST3. I can have the peer-to-peer transactions between providers
and users without middle man when I use Fintech.
Convenience CV1. I can use financial services very quickly when Okazaki and Mendez (2013)
(CV ) I use Fintech.
CV 2. I can use financial services anytime anywhere when
I use Fintech.
CV 3. I can use financial services easily when I use Fintech.
Financial risk FR1. Financial losses are likely when I use Fintech. Featherman and Pavlou
(FR) FR2. Financial fraud or payment frauds are likely when (2003), Lee (2009)
I use Fintech.
FR3. Financial losses due to the lack of the interoperability with
other services are likely when I use Fintech.
Legal risk (LR) LR1. My use of Fintech is uncertain due to many regulations. Barakat and Hussainey
LR2. It is not easy to use Fintech due to the government (2013), Abramova and
regulation. Böhme (2016)
LR3. There is a legal uncertainty for Fintech users.
LR4. It is difficult to use various Fintech applications due to the
government regulation.
Security risk SR1. I worry about the abuse of my financial information (e.g. Featherman and Pavlou
(SR) transaction and private information) when I use Fintech. (2003), Lee (2009)
SR2. My financial information is not secure when I use Fintech.
SR3. I worry that someone can access my financial information
when I use Fintech.
Operational OR1. Fintech companies are not willing to solve the issues when Barakat and Hussainey
risk (OR) financial losses or financial information leakages occur. (2013)
OR2. The organizational responses of Fintech companies are too
slow when financial losses or financial information
leakages occur.
OR3. I worry about the way Fintech companies respond to
financial losses or financial information leakages.
Continuance CI1. I would positively consider Fintech in my choice set. Cheng et al. (2006),
Table AI. intention (CI) CI2. I would prefer Fintech. Lee (2009)
Structure of the CI3. I intend to continue to use Fintech.
survey instrument CI4. I will use Fintech in the future.
About the author Users willing
Hyun-Sun Ryu is a Visiting Professor of Software Department in the Software College of or hesitant to
Sungkyunkwan University in Seoul, Korea. She holds MS Degree from the Graduate School of
Management, Korea Advanced Institute of Science and Technology (KAIST) and PhD Degree from the use Fintech
Korea University Business School, both in management information system, in 2005 and 2014,
respectively. Her work experience includes serving as a Software Engineer and Senior Researcher for
the Samsung Electronics Co., Ltd, and the Korea Government Institute for Economics and Trade. Her
research interests include management of innovation through combining services with technology or 569
with IT, their impact on organizational performance and a new role of IT in Fintech. Her published
research articles appear in Information & Management, IEEE Transactions on Engineering
Management, Service Industries Journal, Information Journal, and others. Hyun-Sun Ryu can be
contacted at: hyunsun.ryu3@gmail.com
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Why People Willing or Hesitant To Use Fintech

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Why People Willing or Hesitant To Use Fintech

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moderating effect of user type

2.2 Benefit-risk framework

time/convenience, performance risks), whereas perceived benefit was seen as single

2.3 Early adopters vs late adopters

3. Research model and hypotheses

3.1 Benefit-risk framework for the continuous use of Fintech

intention. Consequently, the following hypotheses are developed:

3.2 Benefit factors for the continuous use of Fintech

H3. Economic benefit is positively related to perceived benefit.

3.3 Risk factors for the continuous use of Fintech

negatively influencing the continuance intention of Fintech. Consequently, this study

3.4 Moderating effect of user type

4.2 Sample and data collection

20~29 55 22.6 ~6 month 57 23.5

5.1 Measurement model

5.2 Structural model

(a) Assessment of reliability and validity

Continuous intention CI1 0.901 0.931 0.770 0.853** 16.971

User type Statement Reference

Early adopter I am willing to take risk Kim et al. (2010)

Gender Fintech type

Convenience 0.530*** R 2 = 0.486 0.220

Early adopters Late adopters

PB → CI 0.656 12.120*** 0.220 1.218ns 0.436 2.782 0.006***

Path coefficient (t-value)

tests between four

6. Discussions and implications

6.2 Theoretical and practical implications

6.3 Limitations and future research directions

technological innovations”, Journal of Business Research, Vol. 69 No. 5, pp. 1701-1706.

adopting an information technology innovation”, Information Systems Research, Vol. 2 No. 3,

(The Appendix follows overleaf.)

Constructs Questionnaire Reference

PR3. Overall, I think that there is little benefit to use Fintech

1. Ramírez-CorreaPatricio Esteban, Patricio Esteban Ramírez-Correa, GrandónElizabeth E.,

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PB → CI 0.656 12.120* 0.220 1.218ns 0.436 2.782 0.006*