The Impact of Perceived Risk and Technology Acceptance Model on

Gen Z's Adoption of Digital Banking

LEDIS JULIA, PRITI SIWA LINGGAM, RAFIADRI HIBATULLAH, JERRY S. JUSTIANTO

Faculty of Digital Business,

Bina Nusantara University,

Jl. Hang Lekir 1 No 6, Jakarta,

INDONESIA

Abstract: - This study examines the effect of perceived usefulness, perceived ease of use, and perceived risk on

Gen Z's attitude toward using digital banking. Furthermore, this study examines whether the attitude toward

digital banking influences their intention to use it. This research applied a quantitative approach, with the

sample study being Gen Z between the ages of 18 and 25. With a total sample size of 148 respondents, an

online questionnaire was distributed through Google Forms to gather the data. Structural Equation Modelling

(SEM) with SmartPLS 4.0 software is the method of data analysis employed. It was found that perceived

usefulness and perceived risk have a significant effect on attitude toward digital banking, whereas perceived

ease of use does not have a significant effect. Perceived ease of use is positively significant towards perceived

usefulness. Lastly, attitude toward the use of digital banking has a positive effect on the intention to use digital

banking. Novelty/value- One characteristic of Generation Z is their familiarity with technology. Gen Z is the

Generation that will continue to utilize technology; thus, it is crucial to understand their decisions about the

usage of digital banking. This study sheds light on previously understudied aspects affecting attitudes and

intentions toward digital banking in Indonesia.

Key-Words: - Perceived Usefulness, Perceived Ease of use, Perceived Risk, Intention to use, Digital banking,

Technological Acceptance Model

Received: May 3, 2022. Revised: August 6, 2023. Accepted: September 8, 2023. Available online: October 19, 2023.

1 Introduction

Fintech has increased due to the impact of rapid

information technology development on mobile

devices. Consumers, notably members of

Generation Z, will benefit from this new

technology, which is anticipated to simplify user

transactions. The Internet generation may spend

more than seven hours per day online. As the latest

Generation, Generation Z is distinguished by their

familiarity with technology as they have grown up

and been exposed to it. This generation has lots of

innovation, so they can use technology to innovate

everything. In modern digital life, digital literacy is

crucial, particularly for Generation Z. Furthermore,

the millennial generation's loyalty is minimal, so

millennials will reject it without hesitation when a

superior product is available. Additionally, changes

in societal lives have been affected by the

advancement of information technology and the

usage of electronic currencies. This new technology

was intended to benefit customers by making

consumer transactions more convenient and

straightforward, [1]. The rapid growth of

information technology has transformed the

businesses. The development of information

technology has affected the banking industry by

placing information technology.

One of the factors that support this

transformation are smartphone adoption and

massive internet penetration in Indonesia.

Indonesia has the opportunity to become the

country with the largest digital economy

development in the Southeast Asian region. One

interesting phenomenon in Indonesia is the

accelerated adoption of digital banking by

Generation Z, born between the mid-1990s and

early 2010s. This phenomenon reflects a massive

transformation in the way Generation Z interacts

with financial services. However, despite the huge

potential of digital banking, there are elements that

attract attention, namely the influence of risk

perception and the Technology Acceptance Model

(TAM) in the adoption processes. Many

Generations Z in Indonesia may face dilemmas

regarding the security and privacy of using digital

banking, as well as the extent to which this

technology is convenient and useful to them. This

WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024

phenomenon illustrates the importance of

understanding the psychological complexities and

risk factors involved in Generation Z's decision to

adopt digital banking, and how the influence of

technology can help ease this uncertainty. This is

highlighted in order to develop better strategies to

increase digital financial literacy and encourage the

growth of digital banking in Indonesia.

Governments have tightened laws in response

to the COVID-19 pandemic to account for the

"New Normal." Due to the lack of physical contact

in service interactions, such as banking and

financial services, there has been a rise in customer

demand, [2]. Financial industries should innovate

by completely digitizing their goods and services to

conform to this new norm. Despite its perks and

convenience, digital banking customers must

perform a risk-benefit analysis. Regardless of the

distribution mode, digital banks must provide the

same degree of reliability and service to their

customers. A sizable consumer base still refuses to

employ these services due to uncertainty and

security concerns. Therefore, it would be beneficial

for bank managers to comprehend the reasons for

this reluctance when formulating strategies to

increase digital banking usage. Consumers,

financiers, and policymakers, among others,

began to devote much attention to digital banking.

The distribution of financial goods by the finance

sector and other businesses is most effectively done

via the Internet and mobile applications. Without

the need to invest in or build infrastructure, digital

banking gives residents of developing regions

access to financial services, [3]. Through digital

technology, banks can provide their customers with

higher-quality goods and services while saving

time, cutting operating costs, and improving

supervision, risk management, and security

controls.

Furthermore, Ease-of-Use and Usefulness is a

key hurdle to promoting the distribution of services

among younger users, such as Generation Z (Gen

Z), who appreciate experimenting with new

technologies, including digital institutions. Banks'

tremendous expenditure and effort to deliver these

services will be useless if customers do not accept

or use digital banking services. There are several

previous studies that refer to the technological

acceptance model and also perceived risk regarding

attitude and intention to adopt technology. The

technological acceptance model and perceived risk

have been studied for attitude and intention to

adopt technology. Financial services adoption

perceived usefulness improves client attitudes and

usage intentions, [4]. There is no evidence that

perceived ease of use and perceived risk affect

customer behavior and intention to use. According

to, [5] perceived risk and usefulness both

negatively and favorably affect intention. Perceived

ease of use influences perceived usefulness, which

increases internet banking acceptance, but not

intention to use. Furthermore, the previous research

surveys are mainly taken from age 18 – 50.

Therefore, By balancing the measurement of ease-

of-use with user barriers and creating a more

detailed survey, this feature is expected to offer

novelty, especially for Generation Z. This study

will primarily employ the technology acceptance

model and perceived risk, but it differs from earlier

studies in that it models perceived risk as a single

construct rather than considering its true

characteristics or elucidating why customers reject

such banking services. We undertake a more

thorough analysis of the features of the perceived

risks to better understand its correlation to adopting

digital banking. To evaluate which risk factors are

more important in this sector, we classified

perceived risk into two categories, Financial Risk

and Security Risk, as proposed by, [6].

The primary demographic for digital banking

in Indonesia consists of tech-savvy individuals with

a minimum age requirement of 18–25 years. By

2021 and 2025, the proportion of Generation Z

using digital-only banks without local branches is

projected to increase steadily. In fact, by 2025, 45,4

million members of Generation Z will use digital

banking, up from 27.1 billion this year, [7].

Therefore, this study concentrates on Gen Z

consumers aged 18-25. Thus, this paper

investigates whether perceived risk and TAM

impact customer attitudes toward the intention to

adopt digital banking, especially in Gen Z.

2 Literature Review

2.1 Technological Acceptance Model

TAM is an acronym for Technology Acceptance

Model, which was first introduced in 1989, [8].

According to, [9] TAM believes that the use of

information systems can enhance the performance

of an individual or organization and facilitate the

completion of tasks by its users. It is anticipated

that TAM will assist in predicting a person's

attitude and acceptance of technology and can

provide the necessary fundamental information

regarding the factors that are driving the

individual's attitude, [10]. TAM's primary purpose

is to provide a foundation for comparing user

beliefs, attitudes, and objectives to external factors.

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TAM believes that two individual beliefs,

perceived usefulness and perception of ease of use

are the main influences on technology acceptance

behavior. Perceived Usefulness describes the level

of a person’s confidence that in the use of the

system will improve its performance. Perceived

ease of use describes a person’s degree of

confidence that the use of an information system is

easy and does not require hard work, [11].

Technology Acceptance Model (TAM) is used in

research aimed at identifying and explaining the

influence of benefits and ease on the attitude of the

generation Z in adopting the use of digital banking,

[12].

2.2 Perceived Ease of Use

Perceived ease of use is defined by, [13] as a

person's belief that utilizing technology is

effortless. According to the customer's perception

of digital technologies, ease of use when using

them might be more challenging than not using

them, [14]. The perceived ease of use of an

invention or service is determined by people's

preferences and perceptions of the effort necessary

to get it. The perceived ease of use may impact a

customer's impression of service, causing them to

buy a homogenous product rather than one with

regional variations. If users think a service or

innovation will be difficult to understand and takes

time, they will not purchase it. Customers prefer

options that essentially offer the same activities

with less time to study them, [15].

2.3 Perceived Usefulness

The potential to employ technology to improve the

customer's capability to achieve goals is

emphasized by the concept of perceived usefulness.

Alternatively, perceived usefulness is how a

consumer perceives cloud computing may be

advantageous. Customers define perceived

usefulness as the amount of advantage received

through the use of the technology, [16]. [8], stated

that individuals are motivated to use data systems

more effectively when perceived usefulness is

alluded to with a level of certainty. People appear

to be more likely to adopt digitalization if less

effort is required. People's judgments of early

testing and their decision to use the new tech for

maximized work quality are considered as

perceived usefulness. Perceived usefulness is

another way to describe how users benefit from

using technology, [17]. Hence, individuals are

willing to adopt cashless transactions within

Internet commerce if they perceive advantages

from the banking systems.

2.4 Perceived Risk

Perceived risk is individuals' understanding and

assessment of their decisions' uncertainty and

potentially harmful consequences, [18]. It

represents an individual's subjective expectation of

prospective loss rather than the likelihood of

negative outcomes, [19], [20]. As a result, even

people in the same context will likely perceive risk

sources differently and risk assessments for each

source, [21]. The present study examined two

forms of perceived risk, security, and financial risk,

and these five risks associated with online banking

are explained below:

Security Risk: This is described as a potential loss

brought on by fraud or a hacker jeopardizing an

online bank user's security. By seeming to be a

reliable person in an electronic contact, phishers try

to fraudulently obtain sensitive information, such

as usernames, passwords, and credit card numbers,

[22]. A phishing attack occurs when a user clicks

on a link in a fraudulent email that claims to be

from a reputable source and directs them to a

similarly fraudulent website where their personal

information is collected, [23]. Both fraud and

hackers cause consumers to lose money but also

violate their privacy, which is a main concern for

many Internet users, and using online banking

services makes them susceptible to identity theft,

[24].

Financial Risk: The risk of financial loss resulting

from transaction errors or bank account abuse is

known as. Many customers are concerned about

losing money when purchasing or transferring

money via the Internet. Currently, the assurance

offered in conventional settings through official

processes and receipts is unavailable in online

banking transactions. Hence, customers struggle to

get compensated when there are transactions errors,

[25].

2.5 Attitude

Attitude is a person's good or negative mental state

about a particular activity, [26]. In terms of

adoption or refusal to utilize the technology,

divides such as views, attitudes, and consumer

imaginations around crucial digital banking

elements have become more relevant than the

personal, psychological utilitarian components,

[27]. [28], demonstrate that trait-based customer

differentiation has a stronger influence on the

establishment of consumer attitudes and behavioral

intents than demographic and psychological

elements. Numerous research in the area of e-

business has discovered that a person's attitude

directly and significantly affects their behavioral

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intention to use a certain e-business application,

[29].

2.6 Intention to Adopt

[8], defined intention as a measurement to assess

how strongly an individual perceives their intention

in connection to engaging in the desired activity.

[30], use intention as a factor to figure out how

likely it is that an action will happen in the future.

[31], says that people's intentions are thought to

show what motivates them to do something.

Intentions demonstrate a person's effort and

willingness to put into their intended course of

action. [8], found that "perceived usefulness" and

"perceived ease of use" have a direct effect on

purpose which a person believes that employing a

system will increase his productivity at work. This

variable is pertinent to the study as the digital

banking application is regarded as innovative, and

the benefits offered are strongly associated with

usability. According to several research, there is a

direct connection between attitude and intent to use

and perceived usefulness and attitude, [32].

3 Research Model and Hypothesis

3.1 Hypothesis Development

Perceived usefulness, which convinces people that

technology will improve their jobs, is a crucial part

of the TAM model, [8]. Perceived usefulness is the

degree to which an individual thinks that

employing technology will enhance their

performance. In other words, individual beliefs on

whether Internet banking services are more

beneficial than conventional banking services vary,

[33]. It suggests that consumers will use online

banking services, which might reduce waiting

times and increase output. Perceived usefulness is a

key indicator of technology acceptance.

Technology is more likely to be used the higher its

perceived usefulness. Technology is more likely to

be used if people believe it is useful. The above

discussion, therefore, supports our initial

hypothesis.

Numerous IT fields that are used to evaluate

how well people perform in their profession,

personal lives, and academic pursuits have adopted

perceived usefulness, which relates to the original

TAM paradigm, [34]. According to, [8] perceived

usefulness is the extent to which a person believes

that employing a system will increase his

productivity at work. This variable is pertinent to

the study as the digital banking application is

regarded as innovative, and the benefits offered are

strongly associated with usability.

One of the key factors in the adoption of novel

technology is perceived usefulness, which raises

consumer satisfaction and loyalty. According to,

[35] perceived usefulness is the most important

factor in determining whether digital banking will

be adopted. As opposed to this, [36], discovered

that perceived utility had no appreciable impact on

attitudes toward or desires to use digital banking.

As the usefulness of technology increases,

customers will be happier, and it positively impacts

their attitude, making them highly adopt the

technology. Therefore, the hypothesis created is as

follows:

H1: Perceived usefulness has a positive effect on

customer attitude towards the adoption of digital

banking

Perceived ease of use is the degree to which an

individual feels utilizing a system or technology

would be effortless. Perceived ease of use also

refers to the degree to which clients are at ease

when learning to utilize online banking services.

Therefore, the greater the perceived ease of use of a

program, the greater the likelihood people will

adopt it, [37], [38], argue, in a similar vein, that

the simplicity of use also encourages users to adopt

digital banking services. [39], found that people are

more likely to adopt online banking services if they

are convenient, user-friendly, and simple to

manage.

Perceived ease of use has a substantial positive

influence on attitudes toward usage, [40]; the

perception of ease of use has a substantial impact

on the perceived usefulness of, [41]. A consumer

with a good attitude toward mobile banking, for

instance, will exhibit positive behavior toward

mobile banking use, [42]. Additionally, customers

who find mobile banking beneficial and simple will

have a good attitude toward its utilization, [43]. As

the ease of use of technology increases, the

customer will be happier, and it positively impacts

their attitude, making them highly adopt the

technology, [44]. Therefore, the hypothesis created

is as follows:

H2: Perceived ease of use has a positive effect on

customer attitude towards the adoption of digital

banking

Perceived ease of use refers to the user’s

perception of how easy it is to use or operate that

technology. However, perceived usefulness is the

user’s perception of how the technology can

enhance their performance to make life easier. As

to this concept, it would be how much the users

believe that using digital banking would be

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beneficial for their financial transactions. In the

model, perceived ease of use and perceived

usefulness directly influences a person’s attitude

towards using digital banking which in turn

influences their intention to use. If users find digital

banking ease to use, they are more likely to believe

and use it without much effort, which positively

affect their attitude towards using digital banking.

Similarly, when users perceived digital banking

as useful, this positive perception will contribute to

their attitude. Ultimately, the more positive attitude

than the greater their intention to use digital

banking services. The direct correlation between

the two variables is when users perceived

technology as easy to use, they are more likely to

find it useful. This is because a straightforward user

experience makes it easy for user to realize the

benefit and value of the technology. When a service

is simple to use, consumers feel certain that it will

give them freedom and comfort, [8], [17].

Customers find it more challenging to use and

obtain traditional counter services than digital

banking services. The usability of a service affects

customers' perceptions of its utility and their

attitude toward it, [17], [44]. According to TAM,

perceived ease of use and perceived usefulness

both contribute to the development of positive

associations with using technology, which, together

with perceived usefulness, leads to people's

increased tendency to use it. Additionally,

perceived ease of use is anticipated to positively

impact people's perceptions of technology

usefulness. When technology gets easier to use,

customers will likely have an image of usefulness

from the technology. Therefore, the hypothesis

created is:

H3: Perceived ease of use has a positive effect on

consumers' perceived usefulness towards the use of

Digital banking.

Perceived risk has been used to explain

consumer behavior. Perceived risk is the

expectation of loss by an online or digital banking

user. Perceived risk has several dimensions;

however, in this study, two dimensions are used:

Financial risk and Security Risk. Financial risk is

the possibility of financial loss due to wrong

transactions or erroneous account usage. Many

consumers are hesitant to use digital banking

because they worry about such losses, [25]. Offline

banks often have qualified personnel for

verification of the payee's account number and

transfer amount. However, lacking such protections

in digital banking can lead to insecurity and

uncertainty. Security is defined as a threat that

creates a ''circumstance, condition, or event that has

the potential to cause financial damage to data or

network resources in the form of destruction,

disclosure, modification of data, denial of service

and/or fraud, waste, and abuse'', [45]. Hence,

network and data transaction attacks and

unauthorized access to the account via false or

erroneous authentication are threats in digital

banking. According to, [46], the adoption of digital

banking is significantly hindered by security

concerns. In the context of digital banking,

perceived risk can includes concern about security

and financial loss. Perceived risk can have a

negative impact on customer attitudes toward the

adoption of digital banking. If customers perceive a

high level of risk associated with using digital

banking services, their overall attitude and

willingness to adopt these services can be

negatively affected. Customers might worry about

the security of their sensitive financial information

when using digital banking platforms. If they

believe there's a risk of their personal data being

compromised, they might be hesitant to adopt

digital banking services. They might also be

concerned about the possibility of fraudulent

activities or identity theft in digital banking

transactions. The fear of financial loss and damage

to their credit might deter them from embracing

these services.

H4: Perceived Risk has a negative effect to

customer attitude toward the adoption of digital

banking

Attitude is described as individuals' behaviors

by looking at the extent to which personal activities

are positive or negative. Several researchers have

noted that attitudes are determinants of consumers'

use systems explain that Attitude is the user's desire

to use the system, [47]. Attitudes toward digital

banking are defined as individuals' overall affective

reactions to digital banking, [48]. Attitude play a

crucial role in adoption of digital banking services;

a positive attitude generally leads to a higher

likelihood of adoption. In the context of digital

banking, when individual have a favorable attitude

towards digital banking, they recognize the

advantages of using digital banking and feel at ease

with the technology and its features and it also

links to trust in the security measures and reliability

of the digital banking platform. A positive attitude

toward digital banking is a strong predictor of

adoption. Therefore, a hypothesis can be

formulated:

H5: attitude has a positive effect toward the

adoption of digital banking

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3.2 Research Model

There are 5 constructs in our model, which include

perceived ease of use, perceived usefulness,

security risk, financial risk as an independent

variable, attitude as the mediating variable, and

intention to adopt to use as the dependent variable.

The framework of this research is presented as

follows:

Fig. 1: Research Model (Created by: Authors)

4 Research Method

4.1 Data Collection

For data collection, this study distributed a

structure to DB users in Indonesia. The sample in

this study is Gen Z., [49], states that, based on data

from the Indonesian population census, the

Generation accounts for 60 million or 27.94% of all

Indonesian citizens. Moreover, the popularity of the

Internet among Indonesians has facilitated the

growth and use of a new banking model.

Generation Z has the highest percentage of Internet

adoption compared to other age groups, at about

83,58%. The conceptual model includes a list of 24

questions in 6 constructions, including PU, PEOU,

SR, FR, ATT, and INT.

All items are measured on a Likert-type scale

ranging from “1” (strongly disagree) to “5”

(strongly agree). Partial Least Square Structural

Equation Model (PLS-SEM) software is used to

conduct the study, [50]. This method could explain

the variations between the target constructs with

abnormal data. The initial measurement model is

examined in two-step of the PLS-SEM procedure

to ensure the reliability and validity of the data.

Second, the structural model is evaluated for path

analysis and testing hypotheses.

The sample size for this research is yet

unknown; however, to consider the sample, we will

use the "sample to variable" ratio method. A

minimum observation-to-variable ratio of 5:1 is

suggested by the sample-to-variable ratio, while

values of 15:1 or 20:1 are recommended, [51]. This

means that each independent variable in the model

must be taken into account for a minimum of five

respondents. The 15 or 20 is recommended to avoid

underpowered studies. In this research, there are 5

independent variables. Therefore, our research

sample will be as follows:

4 Independent variable x 20 respondent per

variable = 80 Respondent minimum

4.2 Measurement Development

The instrument was designed to include 2 parts of

the questionnaire. The first part was used to collect

basic information about respondent characteristics,

which included name, gender, age, education, job,

domicile, expenses per month, and experience

using conventional and digital banking. The second

Perceived

Usefulness

Perceived Ease

of Use

Attitude

Intention to

Use

Perceived Risk

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part of the questionnaire was developed based on

perceived usefulness, perceived ease of, security

risk, financial risk, attitude, and intention to use.

Perceived ease of use was adapted from the

measurement defined by, [17], [52], [53]. Perceived

usefulness was adapted from the measurement

defined by, [8], [54], [55]. Perceived risk was

adapted from the measurement defined by, [56],

[57]. Attitude and intention to use were adapted

from the measurement defined, [52], [58], [59],

[60], [61].

5 Result

5.1 Distribution of Participant Profiles

The measurement model was initially examined to

gauge the convergent and discriminant validity of

the data collection. The structural model will next

be investigated to determine the direction and

strength of the theoretical construct.

Table 1 (Appendix) demonstrates that female

participants made up more than half of the

participants in this study, making them the

majority. The participants for this study are Gen Z

in the range of 18-25 years old. In this study, most

of the respondent comes from around

JABODETABEK. Regarding digital banking, the

most used digital bank is ALLO BANK which

covers 29% of the respondents. All the respondents

taken in this study are conventional and digital

bank users.

5.2 Analysis of the Measurement Model

The outer loading in the Table 2 (Appendix)

explains that all variables have results greater than

0.7. The Ease-of-use variable displays the results of

items that meet the conditions (PEOU1 – PEOU5).

Similarly, the usefulness variable displays the

results of items that meet the condition (PU1 –

PU5). Furthermore, a Perceived risk with 2

dimensions, FR with a measurement of FR1 – FR 2

and SR with a measurement of (SR1 -SR 4), also

meets the condition. Intention as the dependent has

also met the condition. However, for the attitude

variable, ATT3 as a result of less than 0.6, so it

must be eliminated. All items in this study were

valid after re-running and deleting the ATT3.

Composite reliability and Cronbach's alpha

have a rule of thumb greater than 0.7, [62]. Table 3

(Appendix) also shows the results of reliability

based on Cronbach's alpha (CA) and composite

reliability (CR), where all variables have results

greater than 0.7, indicating that all variables in this

study are reliable.

Referring to Table 4 (Appendix), the CR for all

constructs is above 0.70, and the AVE values are

between 0.779 and 0.954. The discriminant validity

was assessed using Fornell and Larcker (1971) by

comparing the square root of each AVE in the

diagonal with the correlation coefficients (off-

diagonal) for each construct in the relevant rows

and columns. Overall, discriminant validity can be

accepted for this measurement model and supports

the discriminant validity between the constructs.

5.3 Fit Model and Coefficient of

Determination

Table 5 (Appendix) shows that the adjusted R-

square result for Attitude is 0.461. The variable

(PEOU, PU &, PR) can explain 46.1% of the

relationship between Attitude. Intention has the

adjusted R- squared of 0.470, meaning that attitude

explains 47% of the relationship between Intention.

Lastly, Perceived usefulness has an adjusted R –

Square of 0.719, which shows that ease of use can

explain 71.9% of usefulness, and lastly is Perceived

risk which has an adjusted R-Square of 1.

5.4 Hypothesis Testing

Table 5 (Appendix) displays the result of the

research hypothesis test. The P-Value of 0.003

(<0.05) in the perceived usefulness path to attitude.

Therefore, perceived usefulness has a significantly

positive effect on attitude toward digital banking.

The ease-of-use path toward attitude has a different

result with a p-value of 0.080 (>0.05), indicating

an insignificant yet positive effect on attitude.

Furthermore, ease of use towards usefulness has a

p–value of 0.000, indicating that the relation

between this variable is significant and has a

positive effect. Another relation is perceived risk

towards attitude, which has a p–value of 0.000,

indicating that it has a negative and significant

effect. Lastly, attitude towards intention to use has

a p–value of 0.000 which means it has a

significantly positive affect. P – value in this study

is indicated as significant if it is less than "0.05";

therefore, the result of hypothesis testing is

mentioned in the remark column of Table 6

(Appendix).

Based on the result of Table 6 (Appendix), the

authors confirmed that Perceived Usefulness &

Perceived Risk has a positive relationship with

attitude and intention to use digital banking.

Similarly, Perceived ease of use has a positive

relationship with Perceived Usefulness. The result

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is confirmed due to all the p values of these

variable were less than 0.05. Therefore, Hypothesis

H1,H3,H4 and H5 were accepted.

6 Discussion

Several insightful results can be summarized for

the research framework. It is assumed that applying

the IT framework increases a task's efficiency, [63].

In this research, Perceived usefulness is seen to

have a significant positive effect on attitude.

However, the other two variables did not

significantly affect attitude.

In this study, perceived usefulness has a

significant level of 0.011 which indicates that this

variable has an effect on attitude and the intention

to adopt digital banking. Surveys stated that Gen Z

would gladly use technology if it provided an

obvious advantage or minor security drawbacks

and technology that help them to monitor and

reduce their energy and cost, [64]. The value that

customers place on a technology's quality

determines how helpful it is. Consumers may only

find digital banking beneficial if they think it is

superior to traditional banking. Consumers will

likely adopt it if it has more usefulness. Hence, the

result shows that respondent takes digital banking

as a useful tool to help their finances. The study is

support by, [65].

Perceived ease of use and perceived usefulness

also have a similar effect which is significantly

positive. The result of its significant level is 0.000,

which indicates that when something is easy to use,

it is intuitive, requires minimal effort to operate or

understand, and provides a smooth user experience.

This ease of use can enhance the overall usability

of a product, making it more accessible and

enjoyable for users. This outcome is consistent

with, [4] earlier research.

Moving further, perceived risk has a negative

significant effect on attitude towards digital

banking. Currently, internet banking does not

provide staff assistance, unlike traditional settings

that provide confidence through official procedures

and receipts. As a result, when transaction errors

occur, it is typically difficult for customers to

request compensation. This also explains how

many customers reject Internet banking. The

biggest obstacle to the adoption of Internet banking

is security risk. This reveals that Internet users are

highly concerned about fraud and identity theft.

Supplementing encryption and robust

authentication should be a top priority in this field

to prevent fraud and identity theft. This finding is

supported by, [5].

The result of this study shows that Perceived

ease of use did not have a significant positive effect

on attitude towards digital banking. Customers

perceive the process of using digital banking

services as easy and intuitive, and it can positively

influence their attitude toward it. Customers are

more inclined to choose and accept a user-friendly

system, which fosters a more favorable attitude

toward digital banking. However, in the result

obtained, respondents did not consider digital

banking an easy tool per several measurements

taken in the studies. The fact that Gen Z has grown

up with the Internet, mobile devices, and other

connected technologies may be "normalizing" the

innovations they have witnessed, [66]. The result

reverses the original TAM model, which mentioned

PEOU as a factor that affects attitude. This finding

is supported by, [36], [67], in determining ease of

use towards attitude.

This research shows that attitude toward digital

banking has a positive and significant effect on

using digital banking. In this study, the attitude is

measured by three variables: usefulness, ease of

use, and risk. The respondent, in this case, has a

positive attitude towards digital banking and

increases the intention to use it. Banks must

emphasize a positive attitude toward digital

banking by providing usefulness and understanding

customer needs. According to TAM, an attitude

toward certain behavior is an output of users’

beliefs which are perceived ease of use and

perceived usefulness. This finding was consistent

with past research by, [68], [69].

7 Implication

7.1 Managerial Implication

As highlighted in this paper, the result shed light on

one important factor related to the attitude of gen Z

and their intention to adopt digital banking.

Perceived usefulness is the individual's belief in

how certain technology would improve their

performance or offer other benefits. The perceived

usefulness of digital banking has a significant

impact on the intention to adopt it. Managers in the

banking industry should consider the following

managerial implications related to perceived

usefulness. Perceived usefulness can be a source of

competitive advantage. If customers perceive a

bank's digital banking services as more useful and

beneficial compared to those of competitors, they

are more likely to choose that bank for their

financial needs. Managers should focus on

communicating and promoting the value and

WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024

benefits of digital banking to their customers. This

includes emphasizing convenience, time- saving

features, accessibility, and personalized services.

Digital banking should offer a wide range of

features and services that cater to customers'

financial needs. Managers should continuously

update and improve the functionality of their digital

banking. Managers who prioritize and invest in

enhancing the perceived usefulness of their digital

banking offerings can gain a competitive edge over

their rivals. By considering these managerial

implications, banks can increase the perceived

usefulness of digital banking, ultimately driving

customer adoption and usage of these platforms.

Furthermore, Perceived risk has also influenced

the intention to adopt digital banking in Gen Z.

Managers should proactively address the perceived

risks associated with digital banking by providing

clear and transparent information about security

measures, privacy protections, and fraud prevention

mechanisms. Additionally, managers should

emphasize the reliability and trustworthiness of

their digital banking platforms to build confidence

among potential adopters. To mitigate perceived

risks, managers should continuously invest in

enhancing the security infrastructure of their digital

banking platforms. This includes implementing

advanced encryption technologies, two-factor

authentication, biometric authentication, and

regular security audits. Demonstrating a strong

commitment to protecting customer information

and transactions, managers can instill confidence in

potential adopters and reduce their perceived risks.

By proactively addressing concerns, enhancing

security measures, providing education and

support, and leveraging social proof, managers can

reduce perceived risks and increase customers'

intention to adopt digital banking.

7.2 Theoretical Implication

In terms of theory building, this study attempts to

use the technology acceptance model and perceived

risk. The suggested approach adds to the emerging

literature, particularly in digital banking. The

theoretical implications of the positive effect of

perceived usefulness on attitude and intention to

adopt digital banking in Generation Z can be

understood through the model. TAM suggests that

perceived usefulness is critical to individuals'

attitudes and intentions to adopt a technology.

Regarding digital banking, if Generation Z

perceives digital banking as useful, it will lead to a

positive attitude toward digital banking adoption

and an increased intention to adopt it. This implies

that when Generation Z recognizes the usefulness

of digital banking, they are more likely to develop a

favorable attitude towards it and express a stronger

intention to adopt it.

Furthermore, TAM adds that a barrier to the

adoption of technology is the perception of risk.

When individuals perceive higher risks associated

with digital banking, it can negatively influence

their attitude and intention to adopt it. This implies

that perceived risk is an important factor to

consider when studying individuals' intention to

adopt digital banking. The benefits for the

conducting this research are multifaceted and

substantial. Firstly, this research offers the author

an opportunity to contribute to the understanding of

a timely and relevant topic in digital banking

services. It allows the author to engage with a

pressing issue affecting the Gen Z demographic, a

generation that plays a pivotal role in shaping the

future of digital banking. Secondly, by

investigating into the factors influencing Gen Z's

adoption of digital banking, the author gains

valuable insights into the shades of consumer

behavior and technology acceptance. This

understanding can be applied beyond the scope of

this research, potentially informing strategies for

businesses, financial institutions, and policymakers

seeking to navigate the evolving financial

technology ecosystem.

8 Conclusion and Limitations

This paper aims to explain customers' attitudes

regarding their intention to adopt digital banking.

The proposed model incorporates two categories of

perceived risk for a more thorough assessment. The

conclusions of this study should not be

Generalized, as with any other research. It can be

deduced that perceived usefulness has a favorable

and significant impact on the intention to use

digital banking. Then, attitude toward digital banks

has a positive and significant effect on using digital

banking. Perceived ease of use is also positively

significant towards perceived usefulness. Perceived

risk has a significant negative effect on attitude and

intention of adopting digital banking. However,

perceived ease of use does not have a significant

effect on attitude towards digital banking. This

study can give management in the banking and

non- banking sectors information on the variables

that could affect how the public perceives using

digital banking, allowing enhancements to the

product and service of digital banking.

Additionally, it may provide start-up businesses

ideas for creating more beneficial financial

solutions that are more suitable. For Indonesian

WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024

government, introducing digital banking to citizens

in Indonesia holds immense potential for driving

financial inclusion, economic progress, and

efficient government services. With a substantial

portion of the population lacking access to

traditional banking, digital banking can bridge this

gap by offering a convenient and accessible way to

manage finances. By formulating and enforcing

regulations that ensure security and consumer

protection, the government can instill trust in

digital transactions. Additionally, launching

targeted public awareness campaigns can educate

citizens about the benefits and safe practices of

digital banking, addressing any apprehensions they

might have.

Furthermore, there are not many limitations in

this research that can be addressed in subsequent

studies. The study solely examined Gen Z and did

not accurately represent the behavior of all

demographic age groups. It is expected that future

research will increase the scope to several ages. In

regard to variables, several variables can be used,

such a self - efficacy for future research, and

regarding perceived risk, the researcher has only

taken two dimensions. Hence, the future paper may

take a few more dimensions of perceived risk to

provide more detailed insight. Lastly, the area in

which the research is taken has only been done in

Indonesia; therefore, the area of research can also

be expanded.

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WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024

APPENDIX

APPENDIX 1. Variable Measurement (Created By Author)

Variable

Measurement

Source

Petunjuk penggunaan perbankan digital dapat dengan mudah ditemukan. (PEOU 1)

[45] & [53]

Penggunaan aplikasi perbankan digital dapat dengan mudah dipahami. (PEOU 2)

PERCEIVED

Layanan perbankan digital dapat diakses dengan mudah (PEOU3)

EASE OF USE

Perbankan digital mudah digunakan untuk menyelesaikan kegiatan perbankan saya

[54]

(PEOU 4)

Penggunaan perbankan digital akan mudah (PEOU 5)

Perbankan digital akan meningkatkan kinerja saya melakukan pembayaran (PU1)

[45], [55] [56]

[53]

Aplikasi perbankan digital meningkatkan produktivitas saya (PU2)

PERCEIVED

Aplikasi perbankan digital akan meningkatkan efektivitas pembayaran saya (PU3)

USEFULNESS

Saya merasa perbankan digital berguna (PU4)

Perbankan digital memberikan kontrol yang besar terhadap aktivitas pembayaran saya

(PU5)

Saat mentransfer uang melalui perbankan digital, saya khawatir akan kehilangan uang

[57]

karena kesalahan seperti salah memasukan nomor rekening atau salah memasukan jumlah

uang (FR 1)

Ketika kesalahan transaksi terjadi, saya khawatir bahwa saya tidak bisa mendapatkan

kompensasi dari bank (FR 2)

Saya tidak akan merasa benar-benar aman memberikan informasi privasi pribadi melalui

[57]

PERCEIVED

perbankan digital (SR 1)

RISK

Saya khawatir menggunakan perbankan digital karena orang lain mungkin dapat

mengakses akun saya. (SR 2)

Saya tidak akan merasa aman mengirim informasi sensitif di seluruh perbankan digital.

(SR 3)

Saya pikir menggunakan layanan perbankan digital membahayakan privasi saya (SR 4 )

[58]

ATTITUDE

Menurut saya menggunakan perbankan digital dapat menguntungkan (ATT 1 )

[59]

Mengadopsi perbankan digital akan membuat saya merasa baik (ATT 2)

[60]

Mengadopsi perbankan digital akan membuat saya tidak merasa bahagia (ATT 3) – ( R )

Saya merasa mengadopsi perbankan digital memiliki manfaat bagi saya (ATT 4)

INTENTION

TO USE

Saya akan sangat menyarankan orang lain untuk menggunakan perbankan digital (INT 1)

[61]

Saya akan menggunakan perbankan digital untuk kebutuhan perbankan saya (INT 2)

Saya akan melihat diri saya menggunakan perbankan digital untuk menangani transaksi

[59]

perbankan saya. (INT 3)

Saya akan menggunakan layanan perbankan digital jika diperlukan (INT 4)

[53] [62]

WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024

APPENDIX 2. PLS–SEM MODEL (SmartPLS 4.0 , 2023)

WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024

APPENDIX 3

Table 1. Sample Demographic (SmartPLS 4.0, 2023)

Measure

Item

Frequenccy

Percentage (%)

Age

18–25

148

100%

Gender

Male

28%

Female

107

72%

Domicile

Bali

Bekasi

10%

Bogor

27%

Depok

15%

Jakarta

28%

Medan

Semarang

Surabaya

Tangerang

11%

Yogyakarta

Batam

Education

High School

24%

Undergraduate / S1

108

73%

Post – Graduate / S2

Expenses

<Rp3.000.000

31%

Rp3.000.000 - Rp 4.999.999

61%

Rp5.000.000 - Rp 6.999.999

> Rp7.000.000

Job

Private Employees

32%

Students

25%

Self employed

20%

State Officer

22%

Unemployed

Conventional Bank Used

BCA

32%

Bri

BNI

16%

MANDIRI

20%

CIMB

DANAMON

BTPN

PERMATA

Multiple Bank

16%

Digital Bank Used

JENIUS

18%

Brimo

ALLO BANK

20%

BANK JAGO

14%

DIGIBANK

13%

BLU DIGITAL

PERMATA ME

DSAVE

TMRW

NEOBANK

LINE BANK

LIVIN MANDIRI

Multiple Bank

12%

Use Of Conventional Bank

Savings

55%

Income

45%

WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024

Table 2. Validity Test (SmartPLS 4.0, 2023)

ATT

INT

PEOU

ATT1

0.863

ATT2

0.731

ATT4

0.852

FR1

0.953

FR1

0.840

FR2

0.854

FR2

0.955

INT1

0.853

INT2

0.777

INT3

0.835

INT4

0.787

PEOU1

0.826

PEOU2

0.754

PEOU3

0.743

PEOU4

0.837

PEOU5

0.727

PU1

0.785

PU2

0.785

PU3

0.781

PU4

0.773

PU5

0.818

SR1

0.894

SR1

0.902

SR2

0.906

SR2

0.919

SR3

0.851

SR3

0.893

SR4

0.880

SR4

0.918

Table 3. Reliability Test (SmartPLS 4.0, 2023)

Cronbach’s alpha

Composite Reliability (Rho_c)

ATT

0.757

0.858

0.901

0.953

INT

0.829

0.886

PEOU

0.837

0.885

0.936

0.950

0.848

0.892

0.929

0.949

Table 4. Discriminant Validity: Fornell and Larcker criterion (SmartPLS 4.0, 2023)

ATT

INT

PEOU

ATT

0.818

-0.266

0.954

INT

0.688

-0.045

0.813

PEOU

0.57

0.103

0.703

0.779

-0.298

0.888

-0.087

0.034

0.871

0.607

0.055

0.695

0.849

-0.002

0.789

-0.289

0.758

-0.101

-0.004

0.973

-0.031

0.908

WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024

Table 5. R-Square (SmartPLS 4.0, 2023)

R-Square

R-Square adjusted

ATT

0.472

0.461

INT

0.473

0.470

1.000

0.721

0.719

Table 6. Hypothesis testing (SmartPLS 4.0, 2023)

Original sample (O)

T-stats

P-value

Remark

PU -> ATT

0.406

3.024

0.003

H1: Accepted

PEOU -> ATT

0.236

1.750

0.080

H2: Rejected

PEOU -> PU

0.849

32.126

0.000

H3: Accepted

PR -> ATT

-0.305

4.870

0.000

H4: Accepted

ATT -> INT

0.688

17.586

0.000

H5: Accepted

Notes: PU = Perceived Usefulness; ATT = Attitude; PEOU = Perceived Ease Of

Use; PR = Perceived Risk; ATT = Attitude; INT = Intention.

Contribution of Individual Authors to the

Creation of a Scientific Article (Ghostwriting

Policy)

- Priti Siwa Linggam carried out the writing –

original draft, reviewing and editing

- Ledis Julia was responsible for the statistics

- Rafiadri Hibatullah was responsible for the

investigation and providing resources.

- Jerry S. Justianto was responsible for the

conceptualization and supervising the research

process

Sources of Funding for Research Presented in a

Scientific Article or Scientific Article Itself

No funding was received for conducting this study.

Conflict of Interest

The authors have no conflicts of interest to declare.

Creative Commons Attribution License 4.0

(Attribution 4.0 International, CC BY 4.0)

This article is published under the terms of the

Creative Commons Attribution License 4.0

https://creativecommons.org/licenses/by/4.0/deed.e

n_US

WSEAS TRANSACTIONS on COMPUTER RESEARCH

DOI: 10.37394/232018.2024.12.1

Ledis Julia, Priti Siwa Linggam,

Rafiadri Hibatullah, Jerry S. Justianto

E-ISSN: 2415-1521

Volume 12, 2024