RISK PERCEPTION, RISK TOLERANCE

AND CONSUMER ADOPTION OF

MOBILE BANKING SERVICES

Alice M. Cope
Cornell University

Alexandra M. Rock
Board of Governors of the Federal Reserve System

Maximilian D. Schmeiser *
Board of Governors of the Federal Reserve System

February 15, 2013

ABSTRACT
The increasing availability of mobile banking has the potential to transform the way consumers
interact with their financial institutions and expand access to financial services for previously
underserved populations. However, given the sensitive nature of the information shared when
using mobile banking, its adoption is limited by consumer concerns about the overall security of
the technology. This study uses a unique dataset to examine how consumers’ perceptions of the
risks of using mobile banking, as well as their own personal level of risk tolerance, affect
adoption of mobile banking. We find that consumers who believe that mobile banking is unsafe
or who don’t know how safe it is adopt mobile banking at much lower rates than those who
believe it is safe. We further find that consumers with higher levels of risk tolerance are more
likely to adopt mobile banking, even after controlling for their perceptions of the safety of
mobile banking.

*
Corresponding author contact information: Maximilian D. Schmeiser, Board of Governors of the Federal Reserve
System, 20th and C Sts, NW Washington, DC 20551. Phone: 202-728-5882, Email: max.schmeiser@frb.gov.

Electronic copy available at: http://ssrn.com/abstract=2048565

The ability to bank from a mobile phone has drastically increased with the adoption of mobile

phones, in particular with the adoption of smart phones. However, recent data has shown that

consumers are not adopting and using this technology due to perceived security concerns. Today,

fewer than 15% of Americans are without a mobile phone. Further, almost 45% of the population

uses a smartphone, including iPhone, Android, and Blackberry devices (Javelin 2011). As

technology has advanced, mobile devices have become much more than simply a means of

placing a phone call. The capability to access the Internet on mobile phones is used at least once

a week by over 80% of American smartphone owners (Gross, Hogarth, and Schmeiser 2012).

Giving the ubiquity of mobile phones, and their evolving capability, they are increasingly being

used as a tool for financial management, financial decision making, and shopping, with positive

effects on consumers’ financial well-being (Gross, Hogarth, and Schmeiser 2012).

Mobile banking is one commonly used financial management service on mobile phones

that has been increasing in popularity, with over 40 percent of smartphone users indicating that

they use mobile banking (Javelin Strategy & Research 2011). There are many advantages of

using mobile banking for consumers’ financial well-being including accessibility, convenience,

and personalization (Schwiderski-Grosche and Knospe 2002). The financial services sector has

been particularly adept at connecting mobile users to their mobile technologies. Among 23 of

the top 25 deposit taking institutions in the U.S. that offer mobile banking, 96% (approximately

22) have downloadable apps, 87% (approximately 20) offer mobile web banking, and 70%

(approximately 16) offer SMS text services. Consumers can access these applications on their

phone to perform a variety of banking functions, such as getting account balance information,

transferring money between accounts, or setting up their account to receive text message alerts

with account information (Javelin Strategy & Research 2011).

Electronic copy available at: http://ssrn.com/abstract=2048565

 Given the potential for financial harm, consumers are particularly sensitive to the security

of the ways in which they use financial services. While the convenience of having access to

banking information anytime and anywhere provided by mobile banking may be empowering to

some consumers, the storage of personal financial information and payment information (i.e.,

credit card numbers) on a device that is easily lost, stolen, or exposed to malware presents

obvious risks. If these risks are an overwhelming concern for the consumer, then the consumer

may opt out of the technology. This is especially true if the personal benefits are not

substantially large or understood, or they may choose to adopt the technology after it has been

tested by the market and shown to be safe and/or beneficial. Roger’s (2003) diffusion of

innovation model looks at this directly and notes some consumers, particularly those that adopt

shortly after the technology is introduced to the market, choose to adopt out of a desire and

willingness to take on risk and try new things.

Roger’s (2003, 1965) diffusion of innovation model disaggregates consumers into five

different groups with their rates of adoption forming a normal bell curve. The first group of

adopters is the innovators; these adopters have a desire and a willingness to take on risk to try

new things. The second group is the early adopters who are selective about the technologies they

adopt and may need to see the technology working within the market place before adopting. The

next two groups hold the largest proportion of adopters and are the early majority and the late

majority. The early majority is willing to see how the technology can fit into their lives and then

adopt the technology; the late majority is more skeptical of the technology but is willing to adopt

when most of this uncertainty is resolved. Finally the last group of adopters is the laggards

which may include individuals with an aversion to change. Since mobile banking is a relatively

new technology, it can be argued that adopters of mobile banking today are falling within the

2
early adopters or the early majority group. However, it may be that individuals within the late

majority or the laggards may benefit the most by adopting the technology, especially from a

financial inclusion policy perspective. That being said, while recent data shows that the primary

barrier to consumer adoption of mobile banking technology is a perceived lack of security, those

who have adopted mobile banking may look fundamentally different than the non-adopters in

terms of their willingness to take on risk. Risk is amplified in the mobile scenario where one’s

personal financial information is at stake, improved security is a critical factor in improving

consumer attitudes towards the technology and facilitating adoption (Yang 2005).

As with earlier mobile technologies, it is incumbent on promoters of mobile banking to

engage the consumers who find the risks outweigh the personal benefits and clearly

communicate the benefits of the technology in order to foster further adoption (Venkatesh and

Morris 2000). A study in Norway by Suoranta and Mattila (2003) found the most important

trigger to mobile banking adoption to be when consumers found a relative advantage to using the

technology. This ‘relative advantage’ was revealed through the benefits of availability, 24/7

access, independence of time and place, and portability. Before adopting a new technology,

consumers need to see clear benefits from using the technology, and have the ability to take

advantage of the technology (Lu, Yao, and Yu 2005). As an ever-growing population of

smartphone users arise, the opportunities to use mobile banking as a means of fostering the

financial inclusion of underserved populations may present itself (Servon and Kaestner 2008).

Risk perception is based on accumulated knowledge of one’s environment and

experiences from interaction in the marketplace (Kim, Shin, and Lee 2009). Consumer

perception of risk was found to have significant negative effects on adoption of mobile

technology in the early 2000s; as the perceived risk of the technology increased, adoption

3
decreased (Lee, Lee, and Eastwood 2003). This was further supported in studies showing that

consumer perception of risk is a major impediment to adoption (Howcroft, Hamilton, and Hewer

2002). This indicates that consumers who perceive mobile banking as risky are not adopting the

technology. However, there is an additional component interacting with risk perception in

mobile banking adoption. A consumer’s willingness to take on risk is also an important

determinant of whether a consumer will choose to adopt a new technology. But, a consumer’s

willingness to take on risk, or the consumer’s level of risk aversion, is a ‘softer’ variable that is

hard to identify. Therefore, this study was constructed to build off the earlier literature of

technology adoption and consumer choice models by disaggregating consumer’s trust into their

trust in the technology and their general level of trust. Through the focus on two unique

individual characteristics, one a general level of personal risk tolerance and the other a

perception of the risk of the technology, it is hoped that consumer perception of security risk can

be broken down into the relationship between individual risk aversion and individual mobile

banking aversion to give policy makers a better understanding of why consumers are or are not

adopting mobile banking when they have the ability to adopt.

Therefore the hypothesis tested are:

H1: Higher levels of personal risk tolerance will be positively related to consumers (who

own mobile phones) choosing to adopt mobile banking (mobile banking = 1).

H2: Lower levels of the perceived safety associated with using mobile banking will be

negatively related to consumers (who own mobile phones) choosing to adopt mobile banking

(mobile banking = 1).

4
 LITERATURE REVIEW

Technology Adoption and Consumer Choice

Researchers have long sought to develop an understanding of the behavioral and

psychological factors affecting the adoption of new technology. One of the first models that

developed to look at technology adoption is the theory of reasoned action (TRA) (Fishbein and

Ajzen 1975). The TRA model is used to explain behavioral intention by looking at behavioral

attitudes, normative pressure, usage intention, and actual use (Nysveen, Pedersen, and

Thorbjørnsen 2005). However, this theory does not take into account perceived control, which

Ajzen (1991) built into his model, the Theory of Planned Behavior. Ajzen’s (1991) theory stated

that perceived control is directly related to behavior intention because if consumers find the

technology is too costly, or that the technology is not useful, or that the consumer will not be in

control of the technology, they may opt not to adopt it. To that end, human behavior is affected

significantly by consumers’ favorable or unfavorable attitudes towards the behavior (Ajzen

1991). Along these same lines the technology acceptance model (TAM) developed (Davis 1985).

Davis’s (1985) model predicts that user’s intentions to adopt a technology is based on their

perception of its user friendliness, defined as being free from effort, and usefulness, defined as

improving job performance.

An examination of the literature determines that these models have been used, and

expanded, in order to explore mobile technologies, and mobile banking specifically. Yang (2005)

validated the TAM by finding a positive effect between perceived usefulness and attitude on

mobile banking adoption. Others have further upheld the TAM model in the context of mobile

technology adoption. An analysis of mobile banking users in Taiwan by Luarn and Lin (2005),

found consumer perception of ease of use and usefulness played a significant role in increased

5
intention to adopt the technology. Lu et al. (2005) concur that perceived usefulness and

perceived ease of use are both positively correlated with adoption rates of wireless online

services via mobile technology. These models build upon Davis’s (1985) theories and firmly

establish human perception as a determinant of technological adoption and justify an exploration

of consumer perception towards mobile banking in the United States. Further, Rogers’ (2003)

theory of innovation adoption found perceived attributes of innovations to be highly significant

in determining the rate of adoption, which can otherwise be defined as the timing choice of the

consumer to enter the technology market. In fact, perceived attributes have been found to explain

about half of the variance in the rate of innovation adoption (Rogers 2003, 1965).

Additionally, it has been shown that perception has been found to be particularly

important in the financial services realm, where researchers note that mobile platform providers

will have greater success reaching customers who perceive new services to be easy to use and

convenient (Thornton and White 2001). If the perception by the consumer is that the technology

is useful and easy to use, then they will choose to adopt this technology. It is worth noting that

few previous studies have considered the perception of such attributes as security risk in

consumer choice models, especially within the United States market. One paper of relevance is a

study by Laforet and Li (2005), which examined the relationship between consumer attitudes

towards mobile banking and their adoption of mobile banking in China. They found that the only

significant attitudinal difference between users and nonusers of mobile banking was concern

about the confidentiality and security of the technology, primarily concerns about hackers

gaining access to their information or being the victim of fraud. The study concludes that

attitudes towards security and perception of risk are the most critical factors discouraging

adoption.

6
Risk Tolerance and Choice Models

Prior to surveys directly asking about consumer’s perception of security risk, models

developed to explore technological adoption based off of familiarity and trust. The literature

demonstrates that familiarity breeds acceptance of innovative technology and use of innovative

products and services (Thornton and White 2001). Miyazaki and Fernandez (2001) found that

higher levels of internet experience may lead to lower risk perceptions regarding online shopping

with fewer concerns for online fraud. However, they also found that internet experience may

increase concerns over the security of private information; especially if the consumer has had an

experience with or heard of a breach of security. Trust is also consistently found to be important

in the technology adoption literature and has received an increasing level of attention in research

exploring consumer adoption of mobile technology. Researchers consistently find that online

banking adoption is largely dependent on trust (Howcroft, Hamilton, and Hewer 2002; McKnight

and Chervany 2001; Bhattacherjee 2002). The level of initial trust individuals have in the

technology is a major determinant of the degree to which they will interact and engage with the

product in the future (Kim, Shin, and Lee 2009; McKnight and Chervany 2001). While some

may argue trust is dependent on familiarity, in a study by Gefen (2002) it was found that the root

of trust actually lies in an individual’s personal disposition for trust more than in external factors.

Pavlou (2003) found that trust and perceived risk can be integrated into a technology

adoption model, and defined trust as a belief that the other party will behave in a socially

responsible behavior. This socially responsible behavior includes not taking advantage of the

vulnerabilities of the other person. In mobile banking these vulnerabilities include issues

surrounding a loss of security and so trust in financial services technology is dependent on an

7
inherent belief or conviction in the security of the platform (Gefen 2002; Kim, Shin, and Lee

2009); and the more technologically complex the interactions are, the more trust is required

(Gefen 2002). Kim et al. (2009) observed that a consumers’ need for trust is significantly greater

for the adoption of mobile banking due to the heightened concern regarding exposure of personal

financial information However, while the model by Kim et al. (2009) effectively explores both

personal and external factors that may influence technology adoption, the data came from

Korean mobile banking users which limits the generalization of the results to U.S. consumers

(Kim, Shin, and Lee 2009).

Therefore, consumers who choose to adopt mobile technology must place their trust in

the underlying system; they must trust that the underlying system is sound and not subject to

breaches in security; and they must be willing take on risk. These three requirements may cause

the adopters of mobile banking technology to look fundamentally different in their level of risk

aversion than non-adopters. In the mid-1960s, John Pratt (1964) and Kenneth Arrow (1965)

developed one of the first ways to measure absolute risk aversion from which relative risk

aversion developed. Relative risk aversion is used heavily within portfolio management.

Through the literature on risk aversion, it has been found that gender, race, type of employment,

income, age, height, and parental background have an effect on an individual’s willingness to

take on risk.

Dohmen, Falk, Huffman, and Sunde (2011) specifically found that women, older, and

shorter individuals are less willing to take on risk than individuals with less educated parents.

Gilliam, Chatterjee, and Grable (2010), in comparing measures of risk tolerance, found women

had a lower risk tolerance than men, being older tended to lower an individual’s risk tolerance, as

did being less educated. Ekelund et al (2005), in a study from Finland, found that risk adverse

8
individuals were less likely to be self-employed. Halek and Eisenhauer (2001) looked at life

insurance coverage to determine level of risk aversion and found that self-employed individuals

are not significantly different than individuals employed by others in their attitudes towards

speculative risks but are significantly more risk averse to downside risks. Additionally they

found that education increases an individual’s aversion to pure risk but increases an individual’s

willingness to take on speculative risk; and that race affects risk aversion with minorities being

less risk averse than whites. Through robust testing of three separate and independent sources,

Hartog et al (2002) found that women are more risk averse than men, that increased income

reduces risk aversion, that civil servants are more risk averse than those working in the private

sector and that self-employed individuals are less risk averse than employees. Finally Riley Jr

and Chow (2012) found that relative risk aversion decreases as an individual rises above the

poverty level and decreases significantly for the very wealthy; and that risk aversion decreases

with age up to age 65 at which point it begins to increase with age.

Choice models generally take these levels of risk aversion and combine them with a

vector of demographics and other relevant independent variables in order to attempt to explain

who the consumers are that may choose to adopt a certain good or technology. Traditionally

these models have not been able to capture the ‘softer’ aspects of consumer perception. Ashok,

Dillon, and Yuan (2012) discussed ways to extend a choice model to include attitudinal and other

latent variables. As laid out in the following method section, this paper attempts to capture these

‘softer’ aspects of consumer perception and consumer risk aversion, along with a vector of

demographics, to build off this literature and further explain who does or does not adopt mobile

banking.

9
 METHOD

Survey Data

The data for this study were obtained from a survey conducted by the Federal Reserve Board to

assess consumers’ use of mobile banking. The survey was administered by Knowledge

Networks, a private data collection company, using their online probability-based sample of US

residents ages 18 and older. Respondents were randomly selected from the approximately 50,000

panel members yielding a nationally representative sample of US adults. 1 The survey was

fielded from December 22, 2011 to January 9, 2012. A total of 2,290 respondents completed the

survey. The survey data included 85 questions relating to mobile banking usage and consumer

behavior, as well as a set of demographic, economic, and geographic information. 2 Restricting

our sample to respondents with mobile phones and excluding those observations with missing

values yields an estimation sample of 1,921 observations. When further restricting our sample to

smartphone only users, the number of observations declines to 814.

Dependent Variable

For the purpose of their study, the Federal Reserve defined mobile banking as using a mobile

phone to “access your bank account, credit card account, or other financial account. This can be

done either by accessing your bank’s web page through the web browser on your mobile phone,

via text messaging, or by using an application downloaded to your phone.” This question was

only asked of the 1,994 respondents who owned a mobile phone. The dependent variable in our

1
Detailed information regarding the construction of the Knowledge Networks Panel, as well as research validating
the nationally representative nature of the panel is available in Knowledge Networks. 2012. Mobile Financial
Service. In Knowledge Networks Project Report, edited by S. Rodkin and J. Garrett. Palo Alto.
2
Further information on the survey data are available in the report Consumers and Mobile Financial Services. 2012.
Federal Reserve Board.( http://www.federalreserve.gov/econresdata/mobile-device-report-201203.pdf)

10
study, mobile banking adoption, was derived from the question “Have you used mobile banking

in the past 12 months?” Individuals who responded “Yes” were coded as one, while those who

responded “No” were coded as zero.

Perception of security risk

Consumers’ perception and understanding of the risks associated with mobile banking were

assessed using their responses to the question “How would you currently rate the overall security

of mobile banking for protecting your personal information?” The respondent was able to choose

from 5 responses: Very safe, Somewhat safe, Somewhat unsafe, Very unsafe, and Don’t Know.

The responses to this question were recoded into three separate indicators for perceived risk of

mobile banking: Safe, Unsafe, and Don’t Know. The responses to this question reveal the

consumer’s personal perception of the security risk associated with mobile banking, and provides

insight into consumer understanding of the security concerns surrounding mobile financial

services technology.

Risk Aversion

We are further interested in the extent to which an individual’s own level of risk aversion

influences the adoption of mobile banking conditional on their perception of the risks associated

with mobile banking itself. While we are limited by the fact that the survey did not ask explicitly

about the individual’s willingness to take risks with their own financial information, the risk

tolerance questions asked in the survey have been used extensively in the literature as measures

of individual risk aversion. Moreover, the existing literature on technology adoption and risk

11
aversion, have found that general risk tolerance is strongly suggestive of whether an individual

will adoption a technology.

We use two distinct measures derived from the survey to determine individual risk

aversion. The first measure of an individual’s level of risk aversion was derived from self-

reported willingness to bear investment risk:

Which of the following statements comes closest to describing the amount of financial risk that you are willing to
take when you save or make investments?

a. Take substantial financial risks expecting to earn substantial returns

b. Take above average financial risks expecting to earn above average returns
c. Take average financial risks expecting to earn average returns
d. Not willing to take any financial risks

The wording for this question is identical to that used in the Federal Reserve Board’s Survey of

Consumer Finances (SCF). The responses to this question were disaggregated into four separate

indicator variables for each possible response.

However, given that the possible responses to the self-assessed financial risk question are

somewhat subjective, this question may yield imprecise measures of risk tolerance. Therefore,

we supplement this measure with an alternative measure of risk aversion proposed by Barsky et

al. (1997) and Kimball, Shapiro, and Sahm (2008). Following the procedure outlined in Kimball,

Shapiro, and Sahm (2008) we derive an estimate of a respondent’s risk aversion from their

response to a sequence of questions asking them whether or not they would accept a given

gamble over lifetime income. The first question in the sequence was:

Suppose that you are the only income earner in the family, and you have a good job guaranteed to give you your
current income every year for life. You are given the opportunity to take a new and equally good job, with a 50-50
chance that it will double your income and a 50-50 chance that it will cut your income by one-third (33
percent).Would you take the new job? Yes or No.

If the respondent indicated that they would accept the new job they were then asked:
Now suppose that the chances were 50-50 that it would double your income and 50-50 that it would cut your income
by half (50 percent).Would you still take the new job? Yes or No.

12
If instead the respondent indicated that they would not accept the new job offer presented in the

first question they were then asked:

Now suppose that the chances were 50-50 that it would double your income and 50-50 that it would cut your income
by one-fifth (20 percent).Would you now take the new job?

Based on their sequence of responses individuals were classified into one of four possible risk

aversion categories and assigned the corresponding risk aversion value from Kimball, Shapiro,

and Sahm (2008). The risk aversion parameter runs from zero to one, with higher values

corresponding to higher levels of risk tolerance. This risk aversion value was then substituted for

the previous risk aversion categories used in our model.

Table 1 details the summary statistics for our full sample of mobile phone users. Over 42

percent of respondents own a smartphone and 19 percent are mobile banking users. When asked

to rate the overall security of mobile banking for protecting personal information, approximately

a third of consumers fell into each response category: perceive mobile banking as safe, perceive

mobile banking as unsafe, and don’t know if mobile banking is safe. Further, our first measure of

self-reported risk aversion identified 3 percent of consumers as willing to take substantial

financial risk to earn substantial rewards, 16 percent willing to take above average financial risk

for above average returns, 43 percent as willing to take average financial risks for average

returns, and 37 percent not willing to take any financial risk. For our second measure of risk

tolerance, respondents were assigned one of four possible values based on their answers to the

sequence of gambles over income. While the potential risk tolerance values run from 0

(extremely risk averse) to 1 (extremely risk tolerant) the values observed in our data were: .168,

.232, .261, .327. The average value for this risk tolerance variable was .209, which implies that

most consumers in our data are relatively risk averse, consistent with the finding from our

previous measure of risk tolerance.

13
 Table 2 details the summary statistics of two sub-samples of the full sample, those who

are mobile bankers and those who are not mobile bankers. The mobile banker sub-group has a

slightly higher level of education (39 percent vs. 33 percent have a bachelors or higher), has

more minority respondents, has more employed respondents and fewer respondents not in the

labor force, and is younger (the other demographics has less than a 10 percent difference

between the two groups). These characteristics are in line with the literature on risk aversion is

we are assuming that those who are in the non-mobile banking sub-group are more risk averse.

There are 362 individuals in the mobile banking sub-group and 1,557 individuals in the non-

mobile banking subgroup.

Of the respondents who use mobile banking, 87 percent own a smart phone and 74

percent perceive mobile banking as safe. Of the non-mobile banking users, 32 percent own a

smartphone and approximately 23 percent perceive mobile banking as safe. Of the mobile

bankers approximately 7 percent are willing to take substantial risk to earn substantial reward, 25

percent are willing to take above average financial risk for above average rewards, 38 percent are

willing to take average financial risks for average returns, and 29 percent are not willing to take

any financial risk. Among the non-mobile bankers, 2 percent are willing to take substantial

financial risk to earn substantial financial reward, 14 percent are willing to above average

financial risk for above average financial reward, 44 percent are willing to take average financial

risk for average financial reward, and 39 percent are not willing to take any financial risk. From

a review of the demographics, non-mobile bankers appear to be more risk averse since larger

percent of this population is willing to take average financial risk for average financial reward, or

are not willing to take any financial risk. This holds true when looking at the mobile bankers

value for risk tolerance, .226, which is greater than the non-mobile bankers value for risk

14
tolerance, .206, indicating that mobile bankers as a group are more risk tolerant than non-mobile

bankers.

This finding supports our two hypothesis that: (1) higher levels of personal risk tolerance

will be positively related to consumers (who own mobile phones) choosing to adopt mobile

banking; and (2) lower levels of perceived safety associated with using mobile banking will be

negatively related to consumers (who own mobile phones) choosing to adopt mobile banking.

Empirical Model

We estimate the effect of risk aversion and risk perception on adoption of mobile banking using

the logistic regression:

𝑃𝑟𝑜𝑏(𝐴𝑑𝑜𝑝𝑡𝑖𝑜𝑛𝑖 = 1) = (1 + exp( −(𝛼 + 𝛽𝑀𝑅𝑖 + 𝛾𝑅𝑖 + 𝛿𝑋𝑖 + 𝜀𝑖 )))−1

(1)

Where the dependent variable, Adoption, is a dichotomous variable that equals one if individual,

i, uses mobile banking, and zero otherwise, MR is the vector of indicators for the individual’s

perception of the security risks inherent in mobile banking, R is the individual level measure of

risk aversion, and X is a vector of demographic characteristics including education, race, gender,

household income, marital status, employment status, and age. In the full sample of mobile

phone users we also include an indicator for whether or not the individual owns a smartphone.

All logit coefficient estimates are converted to average marginal effects using the margins

command in Stata version 12.1. Standard errors are calculated using the delta method. We

report these marginal effects in the results tables for ease of interpretation.

From the literature review, the data should show that those with less education,

minorities, women, individuals with relatively lower incomes, married, individuals working for

others, and older individuals (over the age of 65) will be more risk averse. This will indicate that

15
they have a lower value for R. The data should also show that that those with less education,

have lower incomes, are married, are employed by others, and older individuals (over age 65)

will perceive the technology to be more risky. This comes from the literature associated with

Roger’s (1965; 2003) diffusion of innovation which indicates these individuals will be among

the later adopters since these individuals have been found to be less willing to take on risk to try

new things and may not understand how the new technology adds a benefit to their lives.

Considering mobile banking unsafe will result in a lower MR vector.

In order to determine whether the data being used in this study follows the pattern of the

risk literature, the population was disaggregated into three sub-groups and tested for their level

of risk aversion and whether or not they perceived mobile banking to be safe. These three

subgroups were: all mobile bankers, mobile bankers who own smart phones, and those who are

not mobile bankers but own a mobile phone. These three subgroups were chosen to test the

hypothesis that adopters of mobile banking are more risk tolerant than non-mobile bankers, as

shown in the over view of the demographics. The same regressions were run for each of the

subgroups. Table 3 explores whether an individual perceives mobile banking to be safe; table 4

looks at all mobile phone users in the sample; table 5 looks at only smartphone users; and table 6

looks at individuals who own a mobile phone, but are not mobile bankers.

Demographically those who did not perceived mobile banking as safe (table 3), were

women and individuals over 60 from the full sample; and women as well as all age groups

(relative to those under 30) for the non-mobile banker sample, while a high school or bachelor’s

level education (relative to those receiving less than a high school education) found mobile

banking safe. This suggests that education and age have a greater effect on an individual’s

perceptions than other demographic characteristics.

16
 RESULTS

Full sample results

We examine the adoption of mobile banking separately for three groups. First, we include

all mobile phone users in our estimation sample. Second, we restrict our sample to only those

individuals with smartphones, as smartphone users are almost ten times more likely to adopt

mobile banking than non-smartphone users (42 percent adoption rate versus 5 percent adoption

rate, respectively). Then we look at non-mobile bankers who own a mobile phone to gain a

better understanding of the level of risk aversion individuals who mobile bank have versus those

who do not mobile bank.

Table 4 presents results for the full sample of mobile phone users. In our first model

specification, reported in column (1), we estimate adoption of mobile banking solely as a

function of the respondent’s demographic characteristics: education, race, gender, income,

marriage status, employment status, and age. Not surprisingly, we find that age plays a highly

significant role in influencing adoption of mobile banking, with the probability of adoption

dropping substantially with increase in the age category of the respondent. All the age coefficient

estimates were significant at the one percent level.

The regression results seen in column (1) of table 4 indicate that there is only a weak

relationship between educational attainment and adoption of mobile banking holding other

characteristics constant, with none of the coefficients significant at the 1 percent level. There also

appears to be no significant relationship between household income, marital status or

employment status and adoption of mobile banking technology. These coefficient estimates

largely remain unchanged in subsequent specifications that add variables covering perceived

17
security of mobile banking for protecting personal information, tolerance of financial risk

relative to returns, and the calculated individual risk tolerance value.

In the next specification of the model, we examine the effect of the perceived security

risk of using mobile financial services on adoption of the technology. As shown in column (2) of

table 4, consumers who identify mobile banking technology as “Unsafe” were 18.0 percentage

points less likely to adopt mobile banking technology than those who believe the technology is

“Safe”. Those that responded “Don’t know” regarding knowledge about the security risk of the

technology were 19.8 percentage points less likely to adopt than those who believe the

technology is “Safe”. Both estimates are significant at the one percent level.

In column (3) of table 4 we incorporate our first measure of risk aversion into the model

using individual consumer responses regarding the level of financial risk they are willing to bear.

Consumers with the highest risk tolerance, defined by those willing to take substantial financial

risk to earn substantial rewards, were 11.6 percentage points more likely to adopt mobile banking

technology than those not willing to take any financial risk, significant at the one percent level.

Those willing to take on above average financial risk to earn above average returns were 4.7

percentage points more likely to adopt the technology, significant at the five percent level.

Lastly, individuals who would only take average financial risks for average returns were not

statistically more likely to adopt mobile banking than those who would not take any financial

risk. Somewhat surprisingly, with the addition of the measure of risk aversion there was almost

no change in the magnitude of the effect of perceived security risk of mobile banking on

adoption. This suggests that the perceived riskiness of the technology affects the probability of

adoption of mobile banking independent of the respondents’ own individual level of risk

aversion.

18
 The final column (4) in table 4 displays the effect of individual risk aversion on mobile

banking adoption when risk aversion is measured by the risk tolerance value derived using the

procedure outlined in Kimball, Shapiro, and Sahm (2008). The effect of relative risk tolerance on

adoption of mobile banking may be best described through an example comparing the relative

adoption rates of the highest and lowest risk tolerance found in our sample. The scale ranges

from zero to one, but these were not the minimum and maximum values found in our data. The

highest risk tolerance level observed in the data was a .327 and the lowest was a .168, yielding a

difference of .159. When this difference in values is multiplied by the coefficient on our risk

tolerance variable, 0.358, it yields a 5.7 percentage point difference in the probability of mobile

banking adoption between these two levels of risk aversion. In other words, the most risk averse

person in the data is 5.7 percentage points less likely to adopt mobile banking than the least risk

averse person in the data, holding all else constant. This disparity in adoption rates between the

most and least risk averse individuals is similar to the magnitude of the difference found using

self-reported willingness to take financial risk. Thus regardless of the measure used, an

individual’s level of risk tolerance affects their adoption of this new technology.

It is worth noting that when controlling for risk aversion level, using either of the two

methods in our study, the magnitude of the effect of self-perceived mobile banking security does

not change, as seen in columns (2) and (4) of table 4. Again, this finding highlights that the

perceived riskiness of the technology and an individual’s risk tolerance exert independent effects

on technology adoption.

Smartphone restricted results

19
 In table 5 we present results for the sample restricted to smartphone users. As seen in

column (4) of table 4, consumers who own a smartphone are 21 percentage points more likely

than non-smartphone users to adopt mobile banking technology, significant at the one percent

level. Given that smartphone users may be different than non-smartphone users in a variety of

ways, we analyze them separately in order to provide insight into the underlying drivers of

mobile banking adoption among this growing population. The model specifications in table 5

mirror those presented in table 4.

As shown in column (1) of table 5, the coefficient estimates on the demographic variables

generally maintain the same sign and significance level as for the full sample of mobile phone

users; however, the magnitudes of the coefficients are somewhat larger in the sample restricted

to smartphone users. One notable difference between the demographic coefficient estimates in

the sample restricted to smartphone users and the full sample is on the race/ethnicity variables. In

table 4 the race coefficients all are highly significant predictors of mobile banking adoption. In

column (4), which includes further controls for both perceived security of mobile banking and a

measure of risk tolerance, we find that black non-Hispanics are 9.4 percentage points more likely

than whites to adopt mobile banking, other non-Hispanic are 6.0 percentage points more likely to

adopt mobile banking, and Hispanics are 4.8 percentage points more likely to adopt mobile

banking. When restricting the sample to smartphone users only in table 5, consumers who

identified themselves as black non-Hispanic were still more likely to adopt mobile banking

technology than whites; however the results for Hispanics, non-Hispanics, and others were not

statistically significant.

Interestingly, restricting the sample to smartphone users increases the magnitude of the

effect of perception of security risk and both measures of individual risk aversion on mobile

20
banking adoption. Here, consumers who perceive mobile banking as unsafe were 34.7

percentage points less likely to adopt mobile banking than those who believe mobile banking is

safe, as reported in column (2) of table 5. Consumers who responded that they did not know the

safety of mobile banking were 37.3 percentage points less likely to adopt mobile banking than

those who perceived it as safe. For the measure of self-reported financial risk tolerance,

consumers who were willing to take substantial financial risk to earn substantial rewards were

19.0 percentage points more likely to adopt mobile banking than consumers not willing to take

any financial risk, significant at the five percent level. Individuals who were willing to take

above average financial risk for above average returns were 8.9 percentage points more likely to

adopt the technology than those not willing to bear any risk, significant at the five percent level.

Those only willing to take average financial risks for average returns were again not statistically

different than those who were unwilling to bear any risk.

Using the calculated risk tolerance value to assess individual appetite for risk, reported in

column (4) of table 5, yields a 11.1 percentage point difference in the probability of adopting

mobile banking between the most risk averse individual and the lease risk averse individual. This

value is derived by again taking the 0.159 difference in the highest and lowest risk tolerance

values and multiplying it by the coefficient of 0.696 from column (4) of table 5, yielding a

difference of 11.1 percentage points.

Non-Mobile Bankers

In Table 6 we present results for the sample restricted to individuals who own a mobile

phone but are non-mobile bankers. Given that mobile phone owners who do not mobile bank are

different from those that do, we analyze them separately. The model specifications in Table 6

21
mirror those presented in Tables 4 and 5. Appropriately, most of the variables that were

significant from the full mobile bankers group and the smart phone user subset remained

significant in the non-mobile banker subset, but their correlations all changed direction, as shown

in Table 6. This is exactly what should be found since the dependent variable captures those

individuals who do not mobile bank, as opposed to tables 4 and 5 which captured mobile

bankers. Since this pattern continued into the measures of self-perceived safety and individual

level of risk aversion, these results can be used to further support the suggested finding that the

riskiness of the technology affects the probability of adoption of mobile banking independent of

the respondents’ own individual level of risk aversion.

Interestingly, education became statistically significant for non-mobile bankers of higher

levels of education, particularly for individual with some college education, being negatively

correlated with being a non-mobile banker. This finding is supported by the fact that education

and age had the largest effects on whether an individual considered mobile banking safe, shown

in table 3. In table 3, education was positively correlated with the perception of safety and age

negatively correlated; in table 6, education is negatively correlated and age is positively

correlated with whether an individual is a non-mobile banker. This follows the theory that the

prevalence of mobile banking decreases with age and increases with education.

Along these same lines, all three of the sub-sample regressions followed the initial results

from table 3, that both education and age are demographic characteristics prevalent in predicting

mobile banking adoption. Race, while not significant is predicting whether an individual

perceived mobile banking as safe, played a statistically significant role in most of the sub-

samples with black, non-Hispanic individuals being the most likely to adopt mobile banking

(tables 4 and 5); and all races (relative to whites) being negatively correlated with non-mobile

22
banking. This indicates that being a non-white individual positively affects the likelihood of

adopting mobile banking, but not the perception of mobile banking safety. Income, marriage

status, and employment status are not statistically relevant in safety perceptions or influential in

adoption likelihoods.

DISCUSSION

Through the use of two separate measures of risk, the responses to the individual’s perception of

the safety of mobile banking, and a careful review of the demographics of the sub-groups of

mobile bankers and non-mobile bankers, our results highlight the importance of consumers’

perceptions of the security of mobile banking technology on adoption of mobile banking. The

results presented above and in tables 4, 5 and 6 strongly support our hypotheses that the both the

perceived risk of the technology itself, as well as the individual’s own general risk tolerance are

separate influencers on mobile banking adoption.

Our results indicate that more risk averse consumers, independent of their perception of

the risk of mobile banking, are significantly less likely to adopt mobile banking technology.

Given the complexities in accurately measuring individual risk aversion, we employ two distinct

metrics, both of which yield similar results. These findings imply that encouraging consumers to

adopt a new technology requires attention to both their specific risk tolerance in addition to

convincing them of the safety and security of the technology.

From tables 4 and 5 we have found that adoption of mobile banking is significantly and

positively correlated with those individuals willing to take substantial and above average risk.

This holds true for table 6 where race also became significant. Putting this together with the

perception of how safe mobile banking is, those who believe that mobile banking is secure and

23
protects their personal information are significantly more likely to adopt mobile banking

technology than those who do not.

While this may not be surprising, the magnitude of the effect is quite large. Consumers

identifying mobile technology as unsafe or who don’t know how safe the technology is are 20

percentage points less likely to adopt mobile banking than those who think it is safe. In the full

sample with both adopters and non-adopters women were consistently found to be less likely to

consider mobile banking safe. However, for non-mobile bankers alone, education and age were

important factors in determining the perceived security, with education being positively

correlated and age being negatively correlated. This is consistent with the summary statistics for

the mobile banking sub-sample, as mobile bankers were slightly more educated than the full

sample, were more likely to be a minority, had higher income, were more likely to be not

married, be more likely to be employed, and were more likely to be younger than the full sample.

Looking at Roger’s (1965; 2003) diffusion of innovation theory, the more people that use

a technology, the more non-users are likely to adopt it as they become familiar with it and see

how it benefits the lives of the users. As the adoption of mobile banking increases organically,

other members of the population may perceived the technology as more safe as it becomes more

familiar to them, and therefore be more inclined to adopt this technology.

CONCLUSION

While the convenience of having access to banking information anytime and anywhere may be

empowering to some consumers, the storage of personal financial information and payment

information is an obvious risk. If such risks are an over-whelming concern for the consumer,

24
then the consumer may opt out of the technology, especially if the personal benefits are not

substantially large or understood. Moreover, our findings suggest that for this technology an

individual’s general risk aversion and their perception of the risk associated with mobile banking

separately influence whether an individual will adopt mobile banking.

Security perceptions are a very important hurdle to wider adoption of mobile banking.

However, our analysis suggests that there are individuals who currently have the ability to

mobile bank but have not yet adopted. Therefore, an equally important hurdle in increasing the

value an individual may place in the benefits associated with mobile banking. Reflecting on

Roger’s (1965; 2003) diffusion of innovation theory presented earlier, mobile banking adoption

may be greatly increased by addressing the majority of the ‘uncertainties’ individuals have

towards mobile banking. Without clear benefits, any concerns or uncertainty about security will

limit adoption of mobile banking. But if consumers understand how they can gain from the

technology, they will have greater incentive to bear any risk they perceive. Additionally, we have

seen that perception can be greatly influenced by age and education. This suggests that mobile

banking will grow organically as the population ages. Given the widespread penetration of

mobile phones and smartphones, especially among the young, mobile banking technology

presents the opportunity to extend financial services to greater parts of the population. However,

before mobile banking can serve as a means of inclusion for financially underserved populations,

their concerns about the adoption of mobile banking would need to be addressed.

25
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27
TABLE 1
Summary Statistics: Full Sample
Standard
Mean
Deviation
Mobile banking user 0.1884 0.3912
Own a smartphone 0.4237 0.4943
Less than high school (base) 0.0854 0.2795
High school degree 0.3092 0.4623
Some college 0.2676 0.4428
Bachelor's degree or higher 0.3378 0.4731
White non-Hispanic (base) 0.7434 0.4369
Black non-Hispanic 0.0927 0.2900
Other and two or more races non-Hispanic 0.0687 0.2530
Hispanic 0.0953 0.2937
Male 0.4784 0.4997
Female 0.5216 0.4997
Less than $25000 (base) 0.1478 0.3550
HH income $25000 - $39999 0.1484 0.3555
HH income $40000 - $74999 0.2743 0.4463
HH income $75000 - $99999 0.1489 0.3561
HH income greater than $100000 0.2806 0.4494
Married 0.6018 0.4897
Not married; widowed; divorced; or living with partner 0.3982 0.4897
Employed 0.5867 0.4926
Unemployed but in labor force (base) 0.0802 0.2716
Not in labor force: retired; disability; or other 0.3332 0.4715
Ages 18-29 (base) 0.1583 0.3651
Ages 30-44 0.2572 0.4372
Ages 45-60 0.3040 0.4601
Ages over 60 0.2806 0.4494
Mobile banking perceived as safe (base) 0.3222 0.4675
Mobile banking perceived of as unsafe 0.3295 0.4702
Don't know if mobile banking is safe 0.3399 0.4738
Take substantial financial risk to earn substantial rewards 0.0338 0.1809
Take above average financial risk for above average returns 0.1650 0.3713
Take average financial risks for average returns 0.4321 0.4955
Not willing to take any financial risk (base) 0.3691 0.4827
Relative risk tolerance 0.2096 0.0526
Observations 1921
TABLE 2
Summary Statistics: Mobile Bankers and Non-Mobile Bankers
Mobile Bankers Non-Mobile Bankers
Mean Standard Mean Standard
Deviation Deviation
Own a smartphone 0.8702 0.3366 0.3198 0.4666
Less than high school 0.0552 0.2288 0.0925 0.2898
High school degree 0.232 0.4227 0.3263 0.469
Some college 0.326 0.4694 0.2543 0.4356
Bachelor's degree or higher 0.3867 0.4877 0.3269 0.4692
White non-Hispanic 0.6298 0.4835 0.7694 0.4213
Black non-Hispanic 0.1519 0.3595 0.079 0.2698
Other and two or more races non-Hispanic 0.0801 0.2718 0.0662 0.2486
Hispanic 0.1381 0.3455 0.0854 0.2796
Gender 0.4807 0.5003 0.4772 0.4996
Female 0.5193 0.5003 0.5228 0.4996
Less than $25000 0.1298 0.3366 0.1509 0.3581
HH income $25000 - $39999 0.1354 0.3426 0.1516 0.3587
HH income $40000 - $74999 0.2486 0.4328 0.2807 0.4495
HH income $75000 - $99999 0.1547 0.3621 0.1477 0.3549
HH income greater than $100000 0.3315 0.4714 0.2691 0.4436
Married 0.5331 0.4996 0.6172 0.4862
Not married; widowed; divorced; or living with partner 0.4669 0.4996 0.3828 0.4862
Employed 0.7348 0.442 0.5523 0.4974
Unemployed but in labor force 0.0994 0.2997 0.0758 0.2647
Not in labor force: retired; disability; or other 0.1657 0.3724 0.3719 0.4835
Ages 18-29 0.3343 0.4724 0.1175 0.3222
Ages 30-44 0.3867 0.4877 0.2274 0.4193
Ages 45-60 0.1989 0.3997 0.3282 0.4697
Ages over 60 0.0801 0.2718 0.3269 0.4692
Mobile banking perceived as safe 0.7403 0.4391 0.2254 0.418
Mobile banking perceived of as unsafe 0.1602 0.3673 0.368 0.4824
Don't know if mobile banking is safe 0.0967 0.2959 0.3969 0.4894
Take substantial financial risk to earn substantial rewards 0.0746 0.2631 0.0244 0.1544
Take above average financial risk for above average returns 0.2541 0.436 0.1445 0.3517
Take average financial risks for average returns 0.3812 0.4864 0.4438 0.497
Not willing to take any financial risk 0.2901 0.4544 0.3873 0.4873
Relative risk tolerance 0.226 0.057 0.2058 0.0508
Observations 362 1557

29
TABLE 3
Regression Results, Does an individual consider mobile banking safe?
Mobile Bankers Non-Mobile
Mobile Bankers with Smart Phones Bankers
High school degree -0.004 0.029 0.106**
(-0.033) (0.212) (2.329)
Some college 0.001 0.005 0.093
(0.010) (0.041) (1.957)
Bachelor's degree or higher 0.044 0.041 0.139***
(0.373) (0.301) (2.936)
Black non-Hispanic 0.044 0.001 -0.049
(0.634) (0.014) (-1.184)
Other and two or more races non-Hispanic -0.118 -0.106 -0.079
(-1.505) (-1.109) (-1.730)
Hispanic 0.042 0.043 -0.007
(0.575) (0.558) (-0.193)
Female -0.096** -0.084 -0.072***
(-2.080) (-1.661) (-3.543)
HH income $25000 - $39999 0.105 0.056 -0.025
(1.094) (0.514) (-0.632)
HH income $40000 - $74999 0.001 -0.039 0.010
(0.017) (-0.393) (0.293)
HH income $75000 - $99999 0.007 -0.024 0.005
(0.071) (-0.218) (0.119)
HH income greater than $100000 -0.016 -0.052 0.027
(-0.184) (-0.509) (0.722)
Married -0.025 -0.020 0.018
(-0.480) (-0.367) (0.745)
Employed -0.065 -0.025 0.031
(-0.775) (-0.279) (0.763)
Not in labor force: retired; disability; or other -0.110 -0.044 0.024
(-1.186) (-0.416) (0.541)
Ages 30-44 0.040 0.023 -0.088**
(0.672) (0.364) (-2.572)
Ages 45-60 0.019 0.009 -0.105***
(0.278) (0.115) (-3.230)
Ages over 60 -0.193** -0.141 -0.188***
(-2.230) (-1.257) (-5.173)
t statistics in parentheses
** p<0.05 *** p<0.01"

30
TABLE 4
Regression Results, All mobile phone users (1) (2) (3) (4)
High school degree 0.037 0.015 0.011 0.017
(1.054) (0.462) (0.350) (0.509)
Some college 0.071** 0.053 0.046 0.055
(2.016) (1.632) (1.419) (1.666)
Bachelor's degree or higher 0.056 0.034 0.021 0.034
(1.542) (1.008) (0.613) (1.009)
Black non-Hispanic 0.098*** 0.096*** 0.096*** 0.094***
(3.947) (4.107) (4.113) (4.052)
Other and two or more races non-Hispanic 0.030 0.063** 0.062** 0.060**
(1.028) (2.322) (2.286) (2.215)
Hispanic 0.049** 0.048** 0.045** 0.048**
(1.963) (2.079) (1.974) (2.102)
Female 0.008 0.019 0.027 0.021
(0.507) (1.305) (1.837) (1.469)
HH income $25000 - $39999 0.009 0.002 0.005 -0.000
(0.271) (0.071) (0.174) (-0.007)
HH income $40000 - $74999 -0.007 -0.010 -0.009 -0.009
(-0.232) (-0.376) (-0.346) (-0.341)
HH income $75000 - $99999 0.001 0.000 -0.001 0.002
(0.023) (0.017) (-0.051) (0.066)
HH income greater than $100000 -0.014 -0.015 -0.018 -0.016
(-0.481) (-0.565) (-0.647) (-0.591)
Married -0.000 0.001 0.001 0.003
(-0.011) (0.063) (0.077) (0.179)
Employed 0.016 0.009 0.015 0.013
(0.587) (0.326) (0.585) (0.500)
Not in labor force: retired; disability; or other -0.022 -0.014 -0.003 -0.009
(-0.682) (-0.452) (-0.101) (-0.296)
Ages 30-44 -0.067*** -0.049** -0.050** -0.046**
(-3.188) (-2.506) (-2.572) (-2.355)
Ages 45-60 -0.143*** -0.110*** -0.110*** -0.107***
(-6.444) (-5.303) (-5.345) (-5.163)
Ages over 60 -0.188*** -0.127*** -0.125*** -0.121***
(-6.517) (-4.667) (-4.610) (-4.440)
Own a smartphone 0.265*** 0.212*** 0.210*** 0.210***
(15.420) (13.662) (13.544) (13.550)
Mobile banking perceived of as unsafe -0.180*** -0.179*** -0.177***
(-11.992) (-11.877) (-11.799)
Don't know if mobile banking is safe -0.198*** -0.191*** -0.193***
(-10.727) (-10.382) (-10.451)
Take substantial financial risk to earn substantial rewards 0.116***
(3.418)
Take above average financial risk for above average returns 0.047**
(2.209)
Take average financial risks for average returns 0.015
(0.793)
Relative risk tolerance 0.358***
(2.780)
Observations 1921 1921 1921 1921
t statistics in parentheses, **p<0.05; ***p<0.01

31
TABLE 5
Regression Results, Smartphone users only (1) (2) (3) (4)
High school degree 0.109 0.050 0.038 0.054
(1.317) (0.665) (0.506) (0.724)
Some college 0.147 0.109 0.089 0.113
(1.807) (1.476) (1.214) (1.530)
Bachelor's degree or higher 0.098 0.057 0.025 0.059
(1.173) (0.760) (0.326) (0.784)
Black non-Hispanic 0.136** 0.131*** 0.132*** 0.130**
(2.464) (2.598) (2.589) (2.574)
Other and two or more races non-Hispanic 0.022 0.101 0.102 0.094
(0.356) (1.750) (1.761) (1.618)
Hispanic 0.067 0.068 0.066 0.067
(1.257) (1.422) (1.381) (1.409)
Female 0.009 0.031 0.044 0.037
(0.258) (1.019) (1.434) (1.220)
HH income $25000 - $39999 0.085 0.062 0.067 0.055
(1.149) (0.931) (1.008) (0.823)
HH income $40000 - $74999 0.065 0.047 0.046 0.048
(0.975) (0.771) (0.753) (0.792)
HH income $75000 - $99999 0.063 0.063 0.055 0.064
(0.868) (0.956) (0.834) (0.975)
HH income greater than $100000 0.048 0.041 0.035 0.037
(0.703) (0.675) (0.555) (0.608)
Married 0.010 0.012 0.011 0.016
(0.251) (0.341) (0.331) (0.451)
Employed 0.016 -0.002 0.015 0.007
(0.263) (-0.044) (0.261) (0.133)
Not in labor force: retired; disability; or other -0.063 -0.047 -0.023 -0.037
(-0.878) (-0.723) (-0.356) (-0.576)
Ages 30-44 -0.114** -0.085** -0.087** -0.080
(-2.527) (-2.057) (-2.120) (-1.932)
Ages 45-60 -0.250*** -0.189*** -0.191*** -0.186***
(-5.220) (-4.301) (-4.350) (-4.248)
Ages over 60 -0.331*** -0.205*** -0.200*** -0.195***
(-5.257) (-3.470) (-3.380) (-3.302)
Mobile banking perceived of as unsafe -0.347*** -0.345*** -0.342***
(-12.547) (-12.409) (-12.295)
Don't know if mobile banking is safe -0.373*** -0.362*** -0.364***
(-10.306) (-9.934) (-10.011)
Take substantial financial risk to earn substantial rewards 0.190**
(2.538)
Take above average financial risk for above average returns 0.089**
(2.011)
Take average financial risks for average returns 0.032
(0.811)
Relative risk tolerance 0.696**
(2.544)
Observations 814 814 814 814
t statistics in parentheses, **p<0.05; ***p<0.01

32
TABLE 6
Regression Results, Non-Mobile Bankers
(1) (2) (3) (4)
High school degree -0.051 -0.028 -0.031 -0.028
(-1.370) (-0.812) (-0.892) (-0.791)
Some college -0.110*** -0.082** -0.081** -0.078**
(-2.966) (-2.386) (-2.304) (-2.202)
Bachelor's degree or higher -0.110*** -0.068 -0.058 -0.057
(-2.876) (-1.914) (-1.600) (-1.577)
Black non-Hispanic -0.128*** -0.123*** -0.117*** -0.115***
(-5.029) (-5.139) (-4.762) (-4.652)
Other and two or more races non-Hispanic -0.046 -0.068** -0.069** -0.071**
(-1.457) (-2.357) (-2.346) (-2.438)
Hispanic -0.088*** -0.077*** -0.074*** -0.079***
(-3.324) (-3.134) (-2.956) (-3.164)
Female -0.005 -0.020 -0.028 -0.026
(-0.306) (-1.297) (-1.804) (-1.643)
HH income $25000 - $39999 -0.006 -0.006 -0.012 -0.002
(-0.174) (-0.195) (-0.411) (-0.068)
HH income $40000 - $74999 -0.018 -0.018 -0.016 -0.010
(-0.632) (-0.692) (-0.600) (-0.353)
HH income $75000 - $99999 -0.028 -0.023 -0.028 -0.024
(-0.849) (-0.768) (-0.903) (-0.807)
HH income greater than $100000 -0.042 -0.031 -0.031 -0.034
(-1.429) (-1.127) (-1.095) (-1.228)
Married -0.014 -0.011 -0.011 -0.010
(-0.731) (-0.657) (-0.623) (-0.572)
Employed -0.040 -0.026 -0.029 -0.027
(-1.362) (-0.957) (-1.040) (-0.987)
Not in labor force: retired; disability; or other 0.026 0.018 0.006 0.014
(0.766) (0.572) (0.192) (0.449)
Ages 30-44 0.095*** 0.066*** 0.057*** 0.054***
(4.332) (3.199) (2.727) (2.594)
Ages 45-60 0.215*** 0.157*** 0.152*** 0.150***
(9.482) (7.427) (7.089) (6.985)
Ages over 60 0.294*** 0.204*** 0.197*** 0.192***
(9.609) (7.234) (6.929) (6.694)
Mobile banking perceived of as unsafe 0.206*** 0.205*** 0.204***
(12.733) (12.581) (12.478)
Don't know if mobile banking is safe 0.254*** 0.249*** 0.248***
(12.885) (12.372) (12.486)
Take substantial financial risk to earn substantial rewards -0.114***
(-3.237)
Take above average financial risk for above average returns -0.054**
(-2.409)
Take average financial risks for average returns -0.005
33
 (-0.262)
Relative risk tolerance -0.448***
(-3.268)

Log-Likelihood
AIC . . . .
Observations 2002 2002 1954 1942

t statistics in parentheses
***
** p<0.05 p<0.01"

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