Digital Banking Adoption in Emerging Economies: Revisiting TAM through the Lens of Perceived Risk

The current study proposed Perceived Risk (PR) as a moderating variable to explore the effect of core Technology Acceptance Model (TAM) variables, namely, Perceived Ease of Use (PEOU), Perceived Usefulness (PU) and Intention to Use (ITU) on Digital Financial Consumer Behavior (DFCB). Through this, the study explained how risk perceptions mitigate or enhance the ability of TAM constructs in influencing consumer behavior on digital financial platforms in emerging economies. Through a structured questionnaire, a quantitative, cross-sectional design was applied and data was gathered through the survey of 350 active users of digital banking services across Punjab, Pakistan. The analysis of both direct and moderating hypotheses was performed by Structural Equation Modeling carried out in Smart PLS 4.0. The results indicated that Technology Acceptance Model has a strong and positive impact on Digital Financial Consumer Behavior (B=0.1883, p < 0.001). Further, the analyses indicate that there exists a strong negative correlation between Digital Financial Consumer Behavior and Perceived Risk (B=-0.2833, p < 0.001). Lastly, the relationship between Technology Acceptance Model and Digital Financial Consumer Behavior is moderated by the Perceived Risk (beta = -0.1493, p < 0.001). Enhancing digital banking adoption depends on ensuring consumers feel secure through clear information, strong privacy measures, and transparent security, beyond just offering convenience and accessibility. This paper extends the TAM model by adding a moderator variable, perceived risk, and creates new knowledge about digital financial behavior within the user of the emerging economies.