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What motivates chinese consumers to adopt FinTech services: a regulatory focus theory

Conference Paper · August 2016

DOI: 10.1145/2971603.2971643

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 What Motivates Chinese Consumers to Adopt FinTech
Services: A Regulatory Focus Theory
Younghoon Chang Siew Fan Wong
BNU-HKBU UIC Sunway University
28 Jinfeng Rd. Tangjiawan, 5 Jalan Universiti,
Zhuahai, Guangdong, China Bandar Sunway, Malaysia
+86-756-362-0393 +60-3-7491-8622
younghoonc@uic.edu.hk siewfanw@sunway.edu.my
ABSTRACT
FinTech is a newly emerged service that combines innovative
financial services and latest mobile technology. Since this service
is new, there is a lack of study that investigates consumer behavior
in adopting the service. Founded on Regulatory Focus Theory, our
study aims to explain two different factors that motivate the
adoption of FinTech in China. We plan to collect data from
university students who used Alipay and Tenpay (two of the
leading FinTech companies in China). The findings from our
study will be valuable to FinTech companies in strategizing and
promoting usage of their services.
CCS Concepts
• Information systems➝ World Wide Web➝ Electronic
commerce➝ Digital Cash
Keywords
Fintech; Alipay; Tenpay; Regulation Focus Theory; Use and
Gratification; Security Control.
1. INTRODUCTION
The advent of information technology (IT), especially the rapid and
wide diffusion of smartphones and mobile technology brings many
new services to the consumer market. One of the newly emerged
services is FinTech. FinTech refers to “the segment that is at the
intersection of the financial services and technology sectors where
technology-focused start-ups and new market entrants innovate the
products and services currently provided by the traditional financial
services industry” [1]. With FinTech, consumers can perform mobile
services on-the-go such as making payments, requesting for loans,
purchasing insurance, and performing investments.
The FinTech market is growing rapidly and the momentum is very
strong. Globally, more than 12 billion dollars has been invested in
FinTech sector [2]. According to a PwC report, the transaction amount
of the US FinTech market has passed 7 trillion dollars while in China,
the FinTech market has reached 4 trillion dollars [1]. In
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ICEC '16, August 17-19, 2016, Suwon, Republic of Korea
© 2016 ACM. ISBN 978-1-4503-4222-3/16/08…$15.00
DOI: http://dx.doi.org/10.1145/2971603.2971643
Hwansoo Lee Seon Phil Jeong
Dankook University BNU-HKBU UIC
Jukjeondong, Sujigu Yonginsi 28 Jinfeng Rd. Tangjiawan,
Gyeonggido, Korea Zhuahai, Guangdong, China
+82-31-8005-3959 +86-756-362-0616
hanslee992@gmail.com spjeong@uic.edu.hk
China, there are two leading FinTech services: Alipay and Tenpay.
Alipay is an e-commerce based company while Tenpay is a
mobile messenger based company.
Since FinTech is new, there is a lack of study that investigates
consumer adoption of the technology. Compared to other services,
financial related services require high level of risk control and
motivation to ensure continue usage because these services are
directly linked to personal wealth and well-being [3]. Therefore,
there is the urgency to understand the factors that motivate
consumer adoption of this high risk yet newly emerged
technology that is predicted to bring high value to consumers.
In this paper, we adopt the Regulatory Focus Theory (RFT) as the
overarching theory to explain the factors motivating consumers to
adopt FinTech [3]. Following the current trend in the literature
that explains consumer behavior from a dualistic perspective, we
investigate the motivational factors from the aspects of both costs
and benefits. The understanding achieved in this study will be
valuable to FinTech companies in strategizing and promoting
usage of their services. The findings will also add value to the
body of knowledge in new technology adoption in general and
FinTech adoption in particular.
2. Literature Review
2.1 Regulatory Focus Theory
Regulatory focus theory (RFT) explains people's perceptions in
the decision making process when pursuing their goals.
Specifically, it examines the relationship between the motivation
of a person and the process in which they pursue their goal. RFT
posits that through motivation, we will be able to understand how
one approaches a task or a goal. People adopts two different and
independent self-regulatory orientations in their pursuit of goals:
prevention and promotion [3].
People who are promotion-focused and prevention-focused differ
in three forms. First, they differ in their motivation to satisfy.
Second, they differ in their goals and standards related to
achievement. Third, they differ with regard to the types of
outcome that are important to them. Promotion-focused
individuals concentrate on hopes, accomplishments, and gains and
thus go after positive outcomes. They pursue personal growth to
realize their ‘ideal self’. Prevention-focused individuals
concentrate on safety, responsibilities, and non-losses and thus
trying to avoid potential losses or negative outcomes. They pursue
security and safety by following the guidelines and the rules to
realize their ‘ought self’.
Previous studies have used RFT to explain consumer behavior and H10: Data integrity positively affects trust
organizational behavior [4][5][6]. RFT helps to understand why
consumers look for pleasure and want to avoid risk in their 2.4 Trust, Satisfaction & Continuance Use
actions. We argue that FinTech consumers can also be classified Intention
into those who are promotion-focused and those who are In the fields of information security and e-commerce, trust reflects
prevention-focused because it is a natural consumer instinct to one’s basic attitude toward certain technology [9]. Mayer et al.
want to maximize pleasure and minimize risk. [10] define trust as “the willingness of a party to be vulnerable to
2.2 Promotion-Focused – Benefit Theory the actions of another party based on the expectation that the other
will perform a particular action important to the trustor,
Promotion-focused process reflects the pleasure part of the RFT. irrespective of the ability to monitor or control that other party.”
When consumers use FinTech, it is likely that they are highly We argue that in the prevention-focused process, trust mediates
motivated when they experience the benefits from the services the relationship between the five elements of security control and
received. In the information systems field, benefit belief has been satisfaction as well as the relationship between the five elements
applied to measure one’s cognitive use experience of IT systems, of security control and continuance use intention. Susanto et al.
media and e-commerce. Since FinTech has some similar [11] show that trust exerts significant impact on satisfaction and
characteristics as IT systems, media and e-commerce, we argue continuance intention to use smartphone banking services.
that benefit belief provides valuable insights and constructs that
can fit into the component of promotion-focused process. Satisfaction is formed after consuming a product or service.
According to the Expectation-Confirmation Theory, consumers
In the Information Systems field, perceived benefit has been found to
will feel satisfy when a product or service meets their expectation.
influence consumer attitude and behavioral intention. Hrischman and
Satisfaction is an important antecedent of continuance intention.
Holbrook [7] categorized benefits into utilitarian benefit and hedonic
We argue that in the promotion-focused process, satisfaction
benefit. Utilitarian benefit relates to functional value such as
mediates the relationship between gratification-
convenience, performance, and cost advantages. Hedonic benefit is
obtained/gratification opportunity and continuance use intention.
non-functional benefits such as enjoyment and happiness. In this Continuance use intention is defined as the decision of consumers
study, we only examine utilitarian benefits because FinTech is a that they are going to continuously use a product or service in the
payment service that adds functional value to its users. post purchase or post-consumption period [12].
Besides utilitarian benefits, we add in network benefit, H11: Trust positively affects satisfaction
specifically network externality. Katz and Shapiro [8] defined
network externalities as ‘‘the value or effect that users obtain from H12: Satisfaction positively affects continuance use intention
a product or service will bring about more values to consumers
H13: Trust positively affects continuance use intention.
with the increase of users, complementary product, or service.’’
We argue that consumers perceive network externality when they
use FinTech, which in turns increase their satisfaction level and
give them a reason to continue using the service in the future.
Utilitarian benefits in this study consist of convenience,
performance, cost advantages, and network benefits consist of
referent network size and perceived complementary.
H1: Convenience positively affects satisfaction
H2: Performance positively affects satisfaction
H3: Cost Advantages positively affects satisfaction
H4: Referent network size positively affects satisfaction
H5: Perceived Complementary positively affects satisfaction.

2.3 Prevention-Focused - Security Control

Prevention-focused process explains one’s behavior to avoid pain or
risk. In FinTech, a critical challenge is to ensure security. Without
good security, consumers are not going to use the service. Since
FinTech resembles a small bank where monetary transactions are
being performed, it is essential to establish good and reliable security
systems along with trustable internal privacy policy. In this study, we
adopt the concept of security control from Suh & Han
[9]. Security control has five categories: authentication, non-
repudiation, confidentiality, privacy protection, and data integrity.
H6: Authentication positively affects trust
H7: Nonrepudiation positively affects trust
H8: Confidentiality positively affects trust
H9: Privacy protection positively affects trust
Figure 1. Research Model
3. Methodology
3.1 Measurement Items
We adapted all measurement items from the literature to fit our
research context. The items for utilitarian, hedonic, integrative,
and mobile convenience came from Ha et al. [13]. The items for
network externality were from Lin and Lu [14] while items for
security control came from Suh and Han [9]. Trust, satisfaction,
and continuance use intention were adapted from Susanto et al.
[11]. All measurement items used seven-point Likert scales.
 3.2 Data Collection
We will collect survey data from current users of Alipay and
Tenpay in a university in China. Incentives will be given to
respondents who complete a 15-minute survey questionnaire.
4. Expected Results
Nowadays, China sees an increasing number of FinTech users.
However, there is a dearth of relevant research in the area. This
paper addresses the gap by shedding lights on consumer behavior
of FinTech. We expect the findings to explain consumers’ self-
regulation process and behavioral intention to use Fintech.
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[2] Accenture. 2015. Future of FinTech and Banking.
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