Assignment 1

Presented to: Dr. Bilal Ahmad

Presented By: Muhammad Akram Malik

Roll No. EU92-PHBAW-S23-001

Cognitive Absorption, User Satisfaction, and Personal Innovativeness: Key

Determinants of Continuance Intention in FinTech Services Usage
Introduction
The word "fintech" is derived from the phrases "financial" as well as "technology." Financial
technology (FinTech) has rapidly advanced the way individuals and businesses handle
financial transactions. Finance and technology have combined to develop new services of
finance that have challenged old systems of finance. The adoption of FinTech has been
widespread globally with more than 60% of people in 27 countries adopting its usage (Ernst
and Young, 2019). Bayram, Talay et al. (2022) and identified had also clarified that several
factors influence an FinTech adoption of individual's, including benefits, effort, social
influence, ease, functionality, usefulness, safety and security. Herdinata and Pranatasari
(2022) discovered how FinTech is having a favourable impact overall economic growth by
creating jobs and increasing GDP. Additionally, Lyons, Kass-Hanna et al. (2022) predicted
that over the next three to four years, emerging economies will witness a 6% rise in their
GDP, with FinTech being responsible for the generation of over 90 million employment
opportunities.

On the other side, there has been little research on what leads individuals to continue using
FinTech services after initial adoption. A rise in the use of FinTech services was also brought
on by the COVID-19 epidemic, in part as a result of government incentives and support.
However, the usage rates continue to be variable (Banna, Hassan et al. 2022). To facilitate
effective FinTech adoption, Understanding the influences on people's decision to continue
utilising these services is crucial. There is quite little research into impact of user engagement
experiences on their intension to continue employing fintech services. Authors such as
Vorderer, Krömer et al. (2016), Zheng, Men et al. (2019) pointed out the need of
investigating how consumers' interactions with fintech technology influence their intention to
continue using technology, particularly in terms of ease as well as novelty. People's daily
lives have grown more intertwined with convenience as novelty provided by features such as
always-on connectivity, personalisation, including wireless portability (Baabdullah 2018,
Matemba and Li 2018).Many people favor fintech as their primary means for doing simple
and difficult online operations (Oliveira, Faria et al. 2014). As applications evolve,
technological developments continue to play an important role in the daily interactions of
individuals and businesses, contributing to the long-term success of businesses in general
(Hong, Thong et al. 2006, Venkatesh, Thong et al. 2012, Zendehdel and Paim 2015, Alalwan,
Baabdullah et al. 2018). Previous IT research placed a high value on the concept of
instrumentality when investigating continuing use behavior. Bhattacherjee (2001), focuses
expectation-confirmation model (ECM), that argues how instrumentality and cognitive
beliefs impact sustained usage behavior in IT. Another research stream contends, based on
individual psychology literature, that factors connected to human-IT interaction play critical
role when forecasting IT ongoing consumption behavior. Trevino and Webster (1992), for
example, emphasize how individuals' overall experiences using technology influence their
perspective on IT. They can take many different forms, including satisfaction (Zhou 2011) or
internal motives (Van der Heijden 2004). Fintech growth in Pakistan has been limited due to
local level investment and inadequate infrastructure (Shahid et al. 2016). The country's cash-
based economy and high cost of banking infrastructure has resulted in 85% financial
exclusion. The lack of fintech’s operating in the country is due to threats to data security and
intellectual property, difficulty attracting talent and customers, and regulatory uncertainty.

Keeping this in view, current research objective is to contribute to existing research body
through cognitive absorption, as well as personal innovativeness impact on the value
proposition of FinTech. It seeks to examine why cognitive absorption (CA) of
individuals' affects their continued use of services provided by fintech utilizing ECM
theory and look at the regulating role of personal innovativeness upon acceptance of
technology for finance through assessing fintech users whose are currently utilizing that. It is
going to be done in order to better comprehend consumer acceptance of fintech, support their
successful implementation, while offering financial operators’ insight into variables that can
affect retention policies as well as motivate current customers to keep utilizing service. Our
research is distinctive since it examines the influence of fintech consumers' experiences using
service and its continuous use.

Earlier studies, like compared to Alkawsi, Ali et al. (2021), looked into direct impact on
aspects as eco-effective feedback, privacy concerns, as well as technology awareness
upon intention to continue utilising fintech. In addition, Alkawsi and Baashar (2020) assessed
impact on environmental awareness and a knowledge of energy-saving practices on financial
usage. Several studies (Venkatesh, Morris et al. 2003, Koivumäki, Ristola et al. 2008)
demonstrated importance having prior experience using given technology to figure out
technological acceptability.The intent of this research as to explore impact caused by
cognitive absorption (CA) upon core elements of ECM, namely satisfaction as well as
continuance intention, within context of fintech utilization. An examination additionally
examines role of personal innovativeness towards regulating user experience using financial
technology. To do this, research integrates expanded version of ECM, which is a well-known
model in IT field continuity (Bhattacherjee 2001), with focus upon CA as provided by
Agarwal and Karahanna (2000).

This research will help fintech operators greatly because it can offer useful insights into
factors are influencing continual utilization of fintech services. When interacting with fintech
applications, certain users exhibit high levels of engagement, focus, along with intrinsic
interest, which leads to their continued use for such technology. Agarwal and Karahanna
(2000) developed notion of cognitive absorption (CA) as an intrinsic motivation construct
which explains individual's intense interest with IT within this context. The intent of this
research can be to look into effect of CA upon a fintech user's intention to continue
using technology. This research will build up enhanced comprehension of fintech adoption
through users' perspective by adopting extended model.

The following are the remaining sections of this paper: In the following section, both
theoretical foundations and assumptions are discussed. Data gathering methods and research
design are discussed in the methodology section. The findings section displays the study's
findings. The paper finishes with an examination of the effects as well as recommendations
for future research.

Problem Statement

Current research on FinTech services primarily focuses on initial adoption, with limited
insight into what drives continued usage. Key psychological factors like cognitive absorption,
which signifies deep engagement with technology, and its influence on user satisfaction and
intention to continue using FinTech services, are not well understood. Additionally, the role
of confirmation in enhancing this cognitive absorption and satisfaction, and how personal
innovativeness moderates the relationship between satisfaction and continued usage, remains
underexplored. This study aims to address these gaps, providing crucial insights for
enhancing user retention and long-term engagement with FinTech services.

Research Questions

 How does cognitive absorption influence users' satisfaction and continuance intention
in the context of FinTech services?
 What role does confirmation play in enhancing cognitive absorption and user
satisfaction in FinTech adoption?
  How does personal innovativeness moderate the relationship between user satisfaction
and the intention to continue using FinTech services?

Research Objectives

 To determine the influence of cognitive absorption on user satisfaction and

continuance intention in the context of FinTech services.
 To assess the role of confirmation in enhancing cognitive absorption and user
satisfaction during FinTech adoption.
 To explore how personal innovativeness moderates the relationship between user
satisfaction and the intention to continue using FinTech services.

Theoretical Framework:

The technological adoption level in the FinTech industry depends on the satisfaction of
consumers. It is crucial to evaluate the level of satisfaction in order to determine if customers
are inclined to persist in using existing services or switching to newest ones. Expectation
Confirmation Theory (ECT) would be a broadly applied framework for evaluating consumer
satisfaction and repurchase behavior. The theory posits that consumers form expectations
prior to purchasing a service or product, and then compare these expectations to their
perceived post-purchase experience to determine their level of satisfaction. This, in turn,
influences their decision to repurchase the service or product inside future. In This Research
framework, as noted by Dabholkar, Shepherd et al. (2000) and later developed by Tsai, Lee et
al. (2020), highlights the importance of aligning pre-purchase expectations with post-
purchase performance in order to foster customer satisfaction and drive repeat business.

According to Tsai, Lee et al. (2020) The ECT posits that consumers' satisfaction levels are
determined by the comparison of their pre-purchase expectations and perceived performance.
In the subject of system sustained usage, the topic of expectation confirmation has garnered a
lot of attention, including Oliver (1980) as well as the modified expectation-confirmation
model initial expectation-disconfirmation theory as well as Bhattacherjee (2001) altered
expectation confirmation model. As per Rahi, Ghani et al. (2018), Foroughi, Iranmanesh et
al. (2019) Expectation Confirmation Model places emphasis on factors related to post-
acceptance but also post-consumption expectations.
Figure 1 Conceptual framework.

Hypotheses:

H1: CA positively impacts user satisfaction.

H2: CA positively influences continuance intention.

H3: Satisfaction positively affects continuance intention.

H4: Confirmation positively affects CA.

H5: Confirmation positively affects satisfaction.

H6: Personal innovativeness moderates the effect of satisfaction on continuance intention.

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