Switching Intentions Among Millennial Banking Customers to Fintech Lending

Muhammad Anif Afandi

Abstract


The purpose of this study is to analyze of switching intentions among millennial banking customers to the financing services of FinTech lending in Indonesia using the PPM framework. 245 primary data were collected by Likert 5 scale category which was subsequently conducted data analysis using the OLS method. The results showed that in the perspective of push effects, all factors have no significant effect on switching intentions or in other words the millennial banking customers have considered that credit/financing services in banking is quite good that it does not encourage them to switch. In the perspective of pull effects, ease of use and pricing benefit factors of FinTech lending have significant effect on switching intentions so that it attracts them to switch. Meanwhile, in the perspective of mooring effects, the factors of service products and reputation significantly affect switching intentions so as to impede them to switch. In addition, Islamic banking customers are known to have higher potential to switch to the financing services of FinTech lending. The results of this study provide useful information for the banking industry, FinTech lending and regulators to be able to develop strategies and effective policies amid the potential of customer switching

Keywords


Switching Intentions; Banking; FinTech Lending; Millennial; PPM

Full Text:

PDF

References


Abduh, M., Kassim, S. H., & Dahari, Z. (2013). Factors Influence Switching Behavior of Islamic Bank Customers in Malaysia. Journal of Islamic Finance, 2(1), 12 – 19.

Afandi, M. A., & Muta’ali, A. (2019). Millennial Banking Customer Perceptions and Its Potential to Switch to Financing Services of FinTech Lending: A Comparative Analysis. Paper presented at The 34th International Business Information Management (IBIMA) Conference, Madrid, Spain.

Al-hawari, M. A. (2014). Emotional stability and switching barriers in the retail banking context. Managing Service Quality: An International Journal, 24(5), 469 – 486.

Bakar, J. A., Clemes, M. D., & Bicknell, K. (2017). A comprehensive hierarchical model of retail banking. International Journal of Bank Marketing, 35(4), 662 – 684.

Bansal, H. S., Taylor, S. F., & James, Y. St. (2005). “Migrating” to New Service Providers: Toward a Unifying Framework of Consumers’ Switching Behaviors. Journal of the Academy of Marketing Science, 33(1), 96 – 115.

Calen., Ade, S., Rosmaneliana, D., & Evadine, R. (2018). The Impact of Return on Equity (ROE) and Debt to Equity Ratio (DER) toward Change in Profit on the Plantation Company Registered on BEI. International Journal of Management Sciences and Business Research, 7(2), 204 – 212.

Cheng, S., Lee, S-J., & Choi, B-J. (2019). An empirical investigation of users’ voluntary switching intention for mobile personal cloud storage services based on the push-pull-mooring framework. Computers in Human Behavior, 92, 198 – 215.

Dietz, M., Khanna, S., Olanrewaju, T., & Rajgopal, K. (2016). Cutting through the noise around financial technology. McKinsey&Company: FinTechnicolor (The New Picture in Finance).

Farah, M. F. (2017a). Application of the theory of planned behavior to customer switching intentions in the context of bank consolidations. International Journal of Bank Marketing, 35(1), 147 – 172.

Farah, M. F. (2017b). Consumers’ switching motivations and intention in the case of bank mergers : a cross-cultural study. International Journal of Bank Marketing, 35(2), 254 – 274.

Hwang, H. S., Shim, J. W., & Park, S. B. (2018). Why we migrate in the virtual world: factors affecting switching intentions in SNS. Information, Communication & Society, 22(14), 2127 – 2137.

Jung, J., Han, H., & Oh, M. (2017). Travelers’ switching behavior in the airline industry from the perspective of the push-pull-mooring framework. Tourism Management, 59, 139 – 153.

Kasali, R. (2018). Self Disruption (Bagaimana Perusahaan Keluar dari Perangkap Masa Lalu dan Mendisrupsi Dirinya Menjadi Perusahaan yang Sehat) Self Disruption (How Does the Company Get Out from the Trap of the Past and Disrupts Itself to be A Healthy Company). Jakarta: Penerbit Mizan Anggota IKAPI.

Kementerian Pemberdayaan Perempuan dan Perlindungan Anak., Badan Pusat Statistik. (2018). Profil Generasi Milenial Indonesia The Profile of Indonesia’s Millennial Generation. Jakarta: Kementerian Pemberdayaan Perempuan dan Perlindungan Anak.

Koutsothanassi, E., Bouranta, N., & Psomas, E. (2017). Examining the relationships among service features, customer loyalty and switching barriers in the Greek banking sector. International Journal of Quality and Service Sciences, 9(3/4), 425 – 440.

Le Wang., Luo, X. (R)., Yang, X., & Qiao, Z. (2019). Easy come or easy go? Empirical evidence on switching behaviors in mobile payment applications. Information & Management, 56(7), 1 – 13.

Lee, J., Ryu, M. H., & Lee, D. (2019). A study on the reciprocal relationship between user perception and retailer perception on platform-based mobile payment service. Journal of Retailing and Consumer Services, 48, 7 – 15.

Li, C-Y. (2018). Computers in Human Behavior Consumer behavior in switching between membership cards and mobile applications : The case of Starbucks. Computers in Human Behavior, 84, 171 – 184.

Li, C-Y., & Ku, Y-C. (2018). The power of a thumbs-up: Will e-commerce switch to social commerce? Information & Management, 55, 340 – 357.

Lindner, M. (2018). Switching behavior phenomenon analysis: SME’s switching behavior from traditional financial institutions to FinTech financing (Master Thesis). Amsterdam Business School.

Maier, E. (2016). Supply and demand on crowdlending platforms: Connecting small and medium-sized enterprise borrowers and consumer investors. Journal of Retailing and Consumer Services, 33, 143 – 153.

Malhotra, N. K. (2019). Marketing Research: An Applied Orientation (7th Edition). New York: Pearson.

Nachrowi, N. D., & Usman, H. (2018). Pendekatan Populer dan Praktis Ekonometrika untuk Analisis Ekonomi dan Keuangan A Popular and Practical Econometrics Approach for Economic and Financial Analysis. Jakarta: Lembaga Penerbit Fakultas Ekonomi Universitas Indonesia.

Piha, L. P., & Avlonitis, G. J. (2015). Customer defection in retail banking Attitudinal and behavioural consequences. Journal of Service Theory and Practice, 25(3), 304 – 326.

PricewaterhouseCoopers. (2016). Customers in the spotlight (How FinTech is reshaping banking). PwC: Global FinTech Survey 2016.

Schwab, K. (2016). The Fourth Industrial Revolution. Cologny/Geneva, Switzerland: World Economic Forum.

Suh, C. J., & Kim, J-H. (2018). Buyers’ switching intentions in a manufacturing supply chain: a migration theory perspective. International Journal of Operations & Production Management, 38(12), 2246 – 2265.

Sun, Y., Liu, D., Chen, S., Wu, X., Shen, X-L., & Zhang, X. (2017). Understanding users’ switching behavior of mobile instant messaging applications: An empirical study from the perspective of push-pull-mooring framework. Computers in Human Behavior, 75, 727 – 738.

TransferWise. (2016). Creating The Perfect Storm. Retrieved December 11, 2019, from https:transferwise.com/gb/blog/creating-the-perfect-storm

Vyas, V., & Raitani, S. (2014). Drivers of customers’ switching behavior in Indian banking industry. International Journal of Bank Marketing, 32(4), 321 – 342.

Yan, R., Zhang, K. Z. K., Yu, Y. (2019). Switching from hotels to peer-to-peer accomodation: an empirical study. Information Technology & People, 32(6), 1657 – 1678.

Ye, C., & Potter, R. (2011). The Role of Habit in Post-Adoption Switching of Personal Information Technologies: An Empirical Investigation. Communications of the Association for Information Systems, 28(35), 585 – 610.




DOI: https://doi.org/10.18196/ijief.3230

Refbacks

  • There are currently no refbacks.


Copyright (c) 2020 International Journal of Islamic Economics and Finance (IJIEF)

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.


International Journal of Islamic Economics and Finance (IJIEF)
International Program for Islamic Economics and Finance 
Department of Economics  
Faculty of Economics and Business
Universitas Muhammadiyah Yogyakarta

Office:
Pascasarjana Building, Ground Floor
Jl. Brawijaya (Ringroad Selatan), Kasihan, Bantul
D.I. Yogyakarta 55183, INDONESIA
Official email: ijief@umy.ac.id