Will proximity mobile payments substitute traditional payments? Examining factors influencing customers' switching intention during the COVID-19 pandemic

PurposeThe objective of this study is twofold: first, to investigate the determinants of customers' switching intention from traditional payments to proximity mobile payments (PMPs) during the COVID-19 pandemic for specific insight on how these factors shape customers' switching intentions; second, this study discusses the relationship between traditional payments and PMP services.Design/methodology/approachThe study data were collected from individual customers who used both traditional payments and PMP in a physical store during the COVID-19 pandemic. Structural equation modeling (SEM) was applied to analyze the validity of the variables and the causal relationships among variables based on 305 valid data.FindingsThe results show that the factor of traditional payments, that is, dissatisfaction positively and significantly influenced customers' switching intention. Factors of PMP, namely perceived usefulness (PUF) and perceived ease of use (EOU), positively and significantly impacted switching intention. In addition, the relationship between traditional payments and PMP, that is, low perceived substitutability was found to negatively influence switching intention, PUF and EOU.Research limitations/implicationsFirst, the study targets are customers with experience in using PMP after the COVID-19 pandemic. It is suggested to compare customers who had experience using PMP before and after the COVID-19 pandemic. Second, although cash and bank cards belong to the category of traditional payments, they have different degrees of contact when transactions occur. The contact rate of bank cards is lower than that of cash. This study did not differentiate between cash and bank cards, which is the main limitation.Originality/valueFirst, this study provides a reference to examine mobile payment usage from the perspective of both incumbent and alternative services conjointly under emergency situations, especially during the COVID-19 pandemic. Second, the application of migration theory to the context of mobile payment extends existing research on mobile payment. Third, this study is among the first to investigate the relationship between traditional payments and PMP.

Research on financial innovations: an interdisciplinary review

PurposeThe financial industry offers a unique setting to study innovations. Financial innovations have fueled the growth of economies, markets and societies. The financial industry has successfully become the breeding ground for innovative services, processes, business models and technologies. This study seeks to provide a holistic view of the literature on financial innovations, synthesize the research findings and offer future directions for research in light of three market developments that are disrupting the industry and opening up a new era for the financial services industry. Disruptions from within and outside the industry offer new generations of radically innovative services. Moreover, new generations of consumers differ from previous generations in their needs and wants and look for innovative ways to handle their financial needs. Finally, significant developments related to financial innovations have emerged in Asia and developing countries.Design/methodology/approachThis study systematically reviews the academic research literature on financial innovations in two phases. The first phase provides a quantitative review of 546 journal articles published between 1990 and 2018. In the second phase, the study synthesizes the extant research on financial innovations and maps them in five research areas: firms' introduction and adoption of FIs, financial innovation development, the outcomes of financial innovations, regulations and intellectual property, and consumers.FindingsThe analysis found that disciplines differ with regard to the employed research methodologies, the units of analysis, sources of data and the innovations they examined. A positive trend in the number of published articles during this period is observed. However, studies have primarily focused on the USA and Europe and less so on other parts of the world. The literature synthesis further identifies research gaps in the available research that highlight future research opportunities in light of the three market disruptions. The financial services industry is on the brink of a new era due to disruptions from within and outside the industry and the entrance of new generations of consumers. Moreover, the financial industry has successfully become the breeding ground for innovative services, processes and business models. Therefore, financial innovations offer promising opportunities for bridging the gap between research on product and service innovations.Research limitations/implicationsThe work provides a holistic and systematic overview of extant research on financial innovations and highlights future research opportunities in light of the three disruptive market developments. It helps researchers take advantage of the opportunities in studying financial innovations while maintaining industry relevance.Originality/valueThe study is the first to review and synthesize the academic research literature on financial innovations across marketing, finance and innovation disciplines. In addition, the study highlights three primary disruptive forces in the financial industry and identifies future research directions in light of these disruptive forces.

Money as a symbol in the relationship between financial advisors and their clients: a dyadic study

PurposeThe paper aims to examine whether financial advisors can understand the symbols and meaning that investors associate with money and whether such ability plays any role in enhancing the advisor-investor relationship in terms of satisfaction, level of trust, referral propensity and loyalty.Design/methodology/approach The authors used a dyadic research design. A total of 186 dyads of financial advisors and their clients took part in the study and completed two parallel self-administered questionnaires.Findings The authors found that financial advisors often can detect the emotional associations that their clients attribute to money. Such ability can enhance their relationship with investors.Research limitations/implicationsThe main limitation of this study is its exploratory nature and the convenience sampling technique that was adopted. Therefore, researchers are encouraged to test the main findings further.Practical implicationsThe results have implications for the development of ad-hoc psychological training to enhance the relationship between financial advisors and investors. Understanding the symbolic meanings and the emotions that clients associate with money may be a prerequisite for a financial services company to succeed and be competitive in the sector.Originality/valueDespite acknowledging that money is not a neutral object but is layered with symbolic meanings and emotional associations, the behavioral finance literature has so far neglected to study these implications from either a theoretical or a practical point of view. This paper aims to fill this gap by investigating the symbolic value of money in the financial services industry.

Determining banking service attributes from online reviews: text mining and sentiment analysis

PurposeThe current study employs text mining and sentiment analysis to identify core banking service attributes and customer sentiment in online user-generated reviews. Additionally, the study explains customer satisfaction based on the identified predictors.Design/methodology/approachA total of 32,217 customer reviews were collected across 29 top banks on bankbazaar.com posted from 2014 to 2021. In total three conceptual models were developed and evaluated employing regression analysis.FindingsThe study revealed that all variables were found to be statistically significant and affect customer satisfaction in their respective models except the interest rate.Research limitations/implicationsThe study is confined to the geographical representation of its subjects' i.e. Indian customers. A cross-cultural and socioeconomic background analysis of banking customers in different countries may help to better generalize the findings.Practical implicationsThe study makes essential theoretical and managerial contributions to the existing literature on services, particularly the banking sector.Originality/valueThis paper is unique in nature that focuses on banking customer satisfaction from online reviews and ratings using text mining and sentiment analysis.

Mortgage delinquency during COVID-19: do financial literacy and personality traits matter?

PurposeMortgage delinquency has become a major crisis following the COVID-19 pandemic. This study explored mortgage delinquency antecedents, focusing on two individual-level factors: financial literacy and personality traits.Design/methodology/approachUsing a large sample of 2,511 consumers, we examined the direct effect of financial literacy and its interaction with personality traits to predict mortgage delinquency based on logistic regression analysis. We further provide several robustness tests to validate our findings.FindingsWe find that financially literate consumers are 6% less likely to delay their mortgage repayment during the COVID-19 pandemic. Moreover, personality traits such as neuroticism and extroversion positively and conscientiousness negatively moderate the given linkage between financial literacy and mortgage delinquency.Practical implicationsBanks and financial companies may devise relevant policies to reduce mortgage repayment by knowing the interplay between financial literacy and personality traits. Personality traits can be considered one of the parameters while sanctioning mortgages to prospective customers.Originality/valueOur research examines the linkage between financial literacy, personality traits and mortgage delinquency based on a large nationally representative sample. Our findings suggest that personality traits moderate the effect of financial literacy on mortgage delinquency.

Artificial intelligence, financial anxiety and cashier-less checkouts: a Saudi Arabian perspective

PurposeThis paper aims to investigate the impact of financial anxiety and convenience on the relation between cashier-less versus traditional checkouts and purchase intentions among Saudi Arabian consumers.Design/methodology/approachIn an online experiment, 329 Saudi participants were randomly assigned to one of two checkout conditions (traditional vs. AI-enabled) in a between-subjects design and indicated their financial anxiety. Through moderation-of-process design, the authors examine and showcase that the effect of convenience leads to higher purchase intent for AI-enabled checkouts. Moreover, the authors examine financial anxiety as an underlying mechanism and show that for high-convenience consumers, this enacts higher purchase intent.FindingsThe effect of AI-enabled checkouts depends on consumers' convenience perception. High-convenience consumers prefer AI-enabled checkouts over traditional ones, whereas low-convenience consumers are indifferent. Based on the Roy adaptation model theoretical framework, this occurs because high-convenience consumers experience greater financial anxiety when using AI-enabled checkouts, which in turn leads to higher purchase intent.Originality/valueTo the authors’ knowledge, this is the first study to explore the reactions of Saudi Arabian consumers toward cashier-less stores versus traditional stores. Interestingly, their intent to purchase increases, due to the financial anxiety they experience while encountering AI-enabled transactions. Due to the limited research of retailers going cashier less, little is known about consumer reactions and how they may differ culturally.

The cognitive-affective nexus on mobile payment continuance intention during the COVID-19 pandemic

PurposeThis study examines the antecedents of continuance intention to use mobile payment in the midst of a pandemic. In general, the cognitive-affective-conative (CAC) framework was used as the theoretical base. More specifically, the dynamic interrelationships between the cognitive and affective constructs were derived from a penta-dimensional perspective.Design/methodology/approachAn online survey yielded 307 responses from youths who were utilizing mobile payment through an online survey which were then analyzed using structural equation modeling (SEM) and artificial neural network (ANN).FindingsBoth positive and negative affective constructs significantly influence continuance intention and can also serve as mediators to the cognitive variables. Interestingly, price savings and referent network size were revealed to be sources of technostress. In addition, despite not having a significant direct influence, price savings should not be overlooked given its indirect significance on continuance intention.Originality/valueBased on the CAC framework, the constructs were conceptualized according to the respective dimensions to develop this study's research model. It was then used to examine their influences on the continuance intention to use mobile payment in the midst of a pandemic. Moreover, a few novel hypotheses were proposed, and the findings serve to increase the understanding of this subject matter.

Consumer intentions, reactance and the marketing implications of policy induced mergers and acquisitions in financial services

PurposeThe purpose of this study is to establish, drawing upon the indirect effects of customer reactance from an emerging economy perspective, the marketing implications of policy induced Mergers and Acquisitions (M&A) in Financial Services.Design/methodology/approachThe study employed a quantitative research approach, relying on data from 517 customers of M&A banks in Ghana. Purposive sampling technique was used in selecting respondents for the study. Hypotheses were tested using a structural equation modelling.FindingsA positive and significant relationship between immersive marketing communication and consumer intention is revealed in the study. The presence of consumer reactance highly influenced the relationship. As a public policy tool, forced mergers and acquisitions was found to increase customer reactance. However, when customers are frequently engaged with relevant and consistent marketing communications through appropriate channels, such reactance would only be partial.Research limitations/implicationsAlthough some of the information were collected, they were not the main focus of our analysis. We acknowledge, from the sample demographics perspective, the study did not consider certain other confounding factors that could influence customers' decisions to remain or switch such as customers' level of banking, type of account, income level, banking experiences in relation to service fees, online banking etc., as these could also potentially influence customers' reactance. Perhaps these may have to be considered in future studies.Social implicationsWhen timely and relevant marketing communications are targeted at the customers who are directly impacted by the M&A process, they would experience reactance, but only partially. This has a range of marketing implications for policy-induced M&A and its impact on consumer intention, reactance and attitudes towards the new entity.Originality/valueThe marketing of financial services literature has been silent on the implications of M&A from a policy induced perspective. This study, therefore, contributes to theory by highlighting that the “destruction” of brand value of the affected firms is relatively high in a policy induced M&A and thus increases the level of customer reactance. This is because a regulator enforced M&A, as public policy, usually generates high public interest and public discourse, leading to a heightened customer reactance. However, when immersive marketing communications are targeted at the customers directly impacted by the M&A, they would experience reactance, but only partially.

Consumer attitudes toward facial recognition payment: an examination of antecedents and outcomes

PurposeFacial recognition payment (FRP) has been recently introduced as a new cashless payment method in retail store context. Anchored on information systems and consumer theories, this research aims to investigate the key antecedents and outcomes of consumer attitudes toward this innovative payment method.Design/methodology/approachThis research used a survey method to obtain data from 795 consumers at retail stores in China. The data were then analyzed by different statistical methods, including descriptive statistics, reliability analysis and structural equation modeling.FindingsResults show that perceived usefulness, perceived ease of use and perceived innovativeness positively affect consumer attitudes toward FRP, while perceived risk negatively impacts such attitudes. In addition, consumer attitudes enhance store satisfaction, and hedonic shopping value plays a mediating role in this relationship.Practical implicationsThis study encourages retailers to adopt FRP that can enhance consumer hedonic shopping value and satisfaction.Originality/valueThis study contributes to the literature by explaining both the antecedents and the outcomes of consumer attitudes toward FRP in retail context. The study also provides fresh insights into how such attitudes can improve consumers' shopping values and satisfaction in an emerging market.

Managers' understanding of artificial intelligence in relation to marketing financial services: insights from a cross-country study

PurposeGiven that managers play a crucial role in developing and deploying AI for marketing financial services, this study was aimed at better understanding their awareness regarding AI and the challenges they are facing in providing the attendant technologies, as well as highlighting key stakeholders and their collaborative efforts in providing financial services.Design/methodology/approachExploratory, inductive research design. The data was gathered through semi-structured interviews with 47 bank managers in both developed and developing countries, including the United Kingdom, Canada, Nigeria and Vietnam.FindingsManagers are aware of the prospects of AI and are making efforts to address AI as a business need but find that there often exist certain challenges in accelerating AI adoption. The study also presents a conceptual framework of AI in relation to financial service marketing, which captures and highlights the interactions among the customers, banks and external stakeholders, as well as the regulators.Research limitations/implicationsBanks must understand their business objectives, the available resources and the needs of their customers. Managers should keep the ethical implications of their working relationships in mind when selecting a team or collaborating with partners. In addition, managers should be trained and assisted in comprehending AI in relation to financial services, while the regulators must be involved in the development of AI for financial service marketing. Finally, it is critical to communicate the prospects for AI to consumers.Originality/valueThis study provides empirical insight into the opportunities, prospects and challenges pertaining to the use of AI in the area of financial service marketing. It also specifically calls into question certain preconceptions regarding AI and its role in financial services, the chatbots adopted for financial service delivery and the role of marketing managers in developing AI.