Financial Technology, Customer Experience, Behaviour and Banks Financial Performance: The Case of United Arab Emirates

Abstract

The primary aim of this study is to investigate the influence of the experiences of users towards Fintech on the banks' financial performance, testing the intermediation role of confirmation, familiarity and customer satisfaction, in light of Expectation Confirmation Theory. In the study, a quantitative approach is used to study the hypothetical associations on the conceptual framework. This thesis collected data from primary and secondary sources, utilizing surveys and bank financial reports. The data was collected from 590 valid surveys and 11 banks' financial reports during Covid-19 pandemic. The research shows how Fintech enhances banks’ profitability. The results reveal that economic, perceived service quality, security risk, operational risk, financial risk are the main factors that met customer expectations after Fintech was experienced. Furthermore, confirmation also has a positive effect on customer satisfaction – moderated by familiarity - and customer satisfaction has a significant relationship with customer intentions and loyalty. In addition, customer loyalty has a positive relationship with a bank’s financial performance. This research identifies the key factors based on customer evaluation of Fintech services in the banking sector and the moderating effect of user familiarity with Fintech. The results advance the area of knowledge on understanding customer perception of Fintech based on actual usage, which also has practical contributions and theoretical implications. The results reveal that economic benefit and service quality are together positively associated with confirmation, while security, operational and financial risks are significantly associated with confirmation. Both convenience and seamless transaction processing results show that they are not significantly associated with confirmation. The positive effect that confirmation leads further to user satisfaction, loyalty and continuous intention to use Fintech are confirmed, and user’s familiarity is found to be a significant moderator in the relationship between confirmation and satisfaction. There is a significant relationship between confirmation, satisfaction and loyalty, which is related to bank financial performance. This study focuses on the United Arab Emirates bank customers which limit its generalisability to other banks globally, however, banks adopt common standards in the application of financial instruments. The empirical study contributes to advancing the understanding of the benefit and risk factors that have useful implications in users’ experience of Fintech. Based on the fact that bank managers, in general, can benefit from this study’s finding to capitalize on the positive factors, to improve Fintech platforms to meet user’s expectations and remove barriers arising from the risks that ultimately improve financial performance. The finding of not confirming convenience and seamless transaction processing as benefit factors on Fintech bank platform requires serious consideration by the bank managers to develop users’ friendly Fintech platforms in the banks. The results inform the bank managers to develop marketing strategies to consider customers’ level of familiarity with Fintech.