Modelling Islamic Banking Technology Adoption in Malaysia: An Application of UTAUT2 with Islamic Financial Literacy as a Moderator

The adoption of technology within Islamic banking in Malaysia is critical for enhancing service efficiency and competitiveness. This study applies the Unified Theory of Acceptance and Use of Technology (UTAUT2) in combination with Islamic Financial Literacy (IFL) to examine the key drivers of technology adoption among Islamic banking customers. Data from 384 working adults were analysed using PLS-SEM. Results revealed that performance expectancy, compatibility, facilitating conditions, perceived risk, and IFL significantly predicted behavioural intention, whereas effort expectancy was not significant. IFL exerted a direct positive effect, without significantly moderating other predictors. Findings elucidate the instrumental and moral motivations underpinning adoption, providing implications for digital strategy aligned with Shariah principles.