Behavioural Biases Influencing Technology Adoption by South African Bank Customers
Abstract
Artificial intelligence technology has the potential to accelerate the financial industry's transformation by offering tailor-made products and services and improving customer experience. This transformation could give banks in South Africa a competitive advantage in the market and globally. This paper aimed to identify the behavioral biases that influence customers' readiness and adoption of innovative technology within their bank. Under a positivist paradigm, nonprobability convenience and snowball sampling were used to collect the data using an online questionnaire. The sample size consisted of 346 banking customers in South Africa. Using factor analysis (EFA), the study found that customers exhibit three dimensions: optimism, innovativeness, and insecurity, which describe technology readiness as a psychological state in which individuals are ready to accept new technology. Additionally, using descriptive and correlation analysis, the findings indicated that customers exhibit overconfidence, anchoring, and loss aversion as the main behavioral biases influencing new technology adoption within banks. The empirical findings of this study are essential as they provide South African banks and risk managers with improved insights and comprehension regarding the profile of customers who may be ready to adopt artificially intelligent banking products. Furthermore, it is recommended that future research follow a mixed-methods approach by also incorporating qualitative interviews to examine the rationales as to why certain behavioral finance biases influence the adoption of AI and others not.
Keywords: behavioral biases, artificial intelligence, technology, technological readiness, South Africa.
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