The Adoption of FinTech during COVID-19 Pandemic in Malaysia


By Associate Professor Dr. Melissa Teoh Teng Tenk & Associate Professor Dr. Angeline Yap Kiew Heong

HELP University

FinTech is derived from the words “Finance” and “Technology”. With innovation and advancement in technology, the incorporation of technology in financial products and services help to improve efficiency and productivity when servicing the clients.

FinTech is also inclusive of mobile payment apps, online banking services and cryptocurrency backed by the Blockchain technology among others.

Digital payment and financial services have recently become increasingly popular during the current COVID-19 pandemic as cashless sales and purchases are promoted to cut down the risk of virus infection.

Presently, the most used cashless payment methods are credit/debit cards, internet banking, while eWallet emerges to become a new trend of mobile payment resulting from the pandemic.

Compared to traditional payment methods, the contactless nature of electronic payment methods enables customers to maintain social distancing and prevent both direct and indirect contacts from the cash transaction process.

This aspect enables customers to formulate their opinions based on the perceived physical and mental advantages of personal security and offers practicality and convenience when employing electronic payment technology as an alternative approach for financial transactions during the pandemic.

Consequently, online purchase of perishable and non-perishable goods, online food ordering, banking transactions become a norm among consumers.

This change has impacted our present daily lives, therefore FinTech is a highly needed and effective approach during this physically isolating period, and given that, its demand is escalating in Malaysia.

In view of this growing trend, the authors and students at HELP University conducted a survey in June 2021 to examine the factors that influence the adoption behaviours of FinTech services among the Malaysian households.

The survey looks at the influence of perceived ease of use, perceived usefulness, social influence, perceived enjoyment, security concern, and personal innovativeness on the intention to adopt FinTech

Intention to adopt is defined as the inclination to engage with an object based on an individual’s acceptance and understanding of the new­ object. The intention to adopt technologies is influenced by numerous factors.

Data showed that as high as 90.9 percent of the survey respondents strongly agreed or agreed to continue using the FinTech services.

Perceived ease of use is identified as how trouble-free and easy a new technology would be to acquire and operate for a new user.

More than 50 percent of the respondents agreed that the FinTech services are straight forward, clear, and understandable.

Perceived usefulness is the belief towards the advancement of their job using technology. The results showed that more than 50 percent of the respondents found FinTech useful and allowed them to accomplish their financial tasks quicker.

Social influence describes the degree of individuals’ FinTech behavioural intention is influenced by social groups, their peers and group’s culture. This experience is especially significant when they face unfamiliar technology.

Results showed that more than 50 percent of the respondents found that their adoption of FinTech is influenced by peers and family around them, while 25.2 percent to 35.8 percent of the respondents were neutral to the social influences.

Perceived enjoyment is a subjective psychological pleasure stemming from the use of new technology. Perceived enjoyment knowingly affects user satisfaction and acts as a motivator which influences an individual's acceptance of information technology that notably drives user satisfaction.

More than 50 percent of the respondents agreed that their experience of FinTech adoption is pleasant. Between 22.7 percent to 28.8 percent of the respondents were neutral about the enjoyment of using FinTech.

Security concerns are about the concern of privacy and security issues when using electronic services, which translate as how safe is the individuals’ private information being exposed to unfriendly parties when using the FinTech services.

Results showed that between 38.5 percent to 59.4 percent of the respondents were alarmed that security issues affect their FinTech adoption, while 37 percent to 42.1 percent of the respondents were neutral about the security safety of using the FinTech services.

Perhaps, the service providers can address this serious concern effectively to protect sensitive information from hackers and to gain confidence from the FinTech users.

In contrast, personal innovativeness has a negligible impact on the technology adoption behaviour.

Personal innovation variable is described as the individual’s willingness to adopt new products taking the uncertainty of the product into account.

It shows that 27 percent of the respondents disagreed that they will be the first to try out FinTech services, and 34.8 percent of the respondents disagreed that they are hesitant to try out new FinTech services.

As a conclusion, Malaysians are open to exploring FinTech, but they may not want to be the first to try it.

It is important for Malaysian financial service providers and financial institutions to continue improving their FinTech related services to meet customer expectations in light of the factors examined.

FinTech plays a vital role in the current global economic growth. The pandemic has changed society and various human practices around the world. Social distancing and containment measures increase the consumers dependency on digital financial service - FinTech.

Cashless transactions are highly favoured during the pandemic especially with restrictions ­set in place to decrease the risks of infection.

Once the habits of dependency on digital services are established, it will be a norm for the adoption of FinTech services and FinTech will continue to remain highly relevant post-pandemic.

Authors’ Profile

  • Dr. Teoh Teng Tenk, Melissa is currently attached to the Faculty of Business, Economics and Accounting in HELP University. 
  • Her experiences include 20 years of teaching in finance and accounting in a few prominent higher education institutions. 
  • She has completed the Chartered Institute of Management Accountant and is a Certified Accountant of MIA. 
  • She received her PhD in Finance from the University of Malaya and was awarded the University of Malaya Fellowship. 
  • Dr. Yap Kiew Heong is currently attached to the Faculty of Business, Economics and Accounting in HELP University. 
  • She has previously associated with TAR UC and UTAR since 1997. Dr Angeline Yap obtained her PhD in Accounting and MBA (Accountancy) from the University of Malaya. 
  • She also received research grants from the University of Malaya, and Fundamental Research Grant Scheme from the Malaysian Government. She has completed the Chartered Institute of Management Accountants and is a Certified Accountant of MIA.
  • She has presented some research papers at national and international conferences, and published research papers in the areas of cryptocurrency, corporate governance, and accounting with peer-reviewed journals.

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