Exploring Generation Z’s Continuance Intention Toward Digital Banking in Malaysia: An Integrated Behavioral Reasoning and Expectation Confirmation Perspective
This study integrates Behavioral Reasoning Theory and the Expectation Confirmation Model to reveal that among Malaysian Gen Z digital banking users, digital financial literacy, satisfaction, and reasons for adoption are the primary drivers of continuance intention, while perceived usefulness and reasons against adoption have no significant direct impact.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
In the modern financial world, a new kind of bank has emerged, one that exists entirely on a smartphone screen. These digital banks have swept through Malaysia, attracting millions of customers who appreciate the speed and convenience of managing money without ever visiting a physical branch. Yet, a critical question remains for the banks themselves: getting a customer to open an account is only the beginning. The real challenge lies in keeping them. This is particularly true for Generation Z, the cohort of young people born between 1997 and 2012, who have grown up with smartphones in their hands. While they are comfortable with technology, being a digital native does not automatically mean a person knows how to navigate financial risks, understand fees, or make sound money decisions. Researchers have long studied why people choose to start using a new service, but far less is known about why they keep using it after the initial excitement fades. To understand this, scientists look at three main ideas: the reasons people give for using a service, the satisfaction they feel after using it, and their actual ability to handle the tools they are using.
A team of researchers at Multimedia University in Malaysia set out to solve this puzzle by focusing specifically on young digital banking users in their country. They wanted to know what keeps a young person logging into their banking app day after day. To do this, they surveyed 355 university students, all between the ages of 15 and 25, who already had experience with a licensed digital bank. These students represented a typical slice of the young Malaysian population, with most earning small amounts of money from allowances or part-time work. The researchers asked these students to rate their feelings about their banking apps, their reasons for choosing them, their confidence in handling financial tasks, and whether they planned to keep using the service. They combined three different ways of thinking about human behavior to build a complete picture of what drives these young users to stay.
The study revealed a surprising hierarchy of what matters most to these young people. The single strongest factor predicting whether a student would continue using a digital bank was not how much they liked the app, nor how useful they thought it was, but rather how financially literate they felt. Digital financial literacy refers to a person's knowledge and skill in using digital tools to manage money safely and effectively. The researchers found that students who felt confident in their ability to understand financial products, evaluate risks, and use the app's features were the most likely to stick with the service. This suggests that for young users, the ability to navigate the financial landscape is more important than the features of the app itself.
Satisfaction came in as the second most important driver. Young users who felt happy with their overall experience—finding the app fast, reliable, and easy to use—were significantly more likely to continue using it. This makes sense for a generation that can switch to a competitor's app with a single download; if the experience is not smooth, they will simply move on. The third factor was the original reasons for adoption. The study confirmed that the benefits that drew these users in initially, such as convenience, social influence from friends, and the relative advantage over traditional banks, continued to matter. These positive reasons acted as a steady motivation, reinforcing their decision to stay.
However, the study also ruled out several common assumptions. The researchers found that the general perception of how "useful" the bank was did not directly influence the decision to stay. For a generation that expects technology to work, usefulness is likely a basic requirement rather than a differentiator; if an app is not useful, they simply do not use it, but if it is, that fact alone does not guarantee loyalty. Furthermore, the study discovered that once young people had already adopted the service, the fears or barriers that might have stopped them from joining in the first place became irrelevant. Concerns about security risks, the complexity of the technology, or a preference for traditional branch banking did not negatively impact their decision to continue using the app. It appears that these barriers act as gatekeepers before a user joins, but once they are inside and have gained experience, these worries fade into the background.
The implications of these findings are clear for the future of banking in Malaysia. For digital banks, the path to retaining young customers does not lie solely in marketing the convenience of the app or trying to lower the perceived risks of using it. Instead, the most effective strategy is to help their users become more capable. By teaching young people how to use digital financial tools safely and effectively, banks can build a deeper, more resilient connection. This approach transforms the relationship from a simple transaction into a partnership where the user feels empowered. For policymakers, the results suggest that financial education should be a core part of the curriculum for young people, preparing them not just to access banking services, but to thrive within them. In a world where switching banks is as easy as deleting an app, the key to loyalty is not just a good interface, but a capable user.
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