Neo Banking Adoption among Banking Customers: An Empirical Study Using PLS-SEM

Authors

• Sree Bhoojitha V, Independent ResearcherFollow
• Vishnucharan N S, Zoho CorporationFollow

Keywords

Neo Banking, Technology Acceptance Model, Perceived Usefulness, Perceived Ease of Use, Trust, Adoption Intention, PLS-SEM, Digital Banking, FinTech.

Document Type

Original Research Article

Abstract

The rapid advancement of financial technology has fundamentally transformed the banking landscape, giving rise to neo banks — fully digital banking platforms operating without physical branches. Despite the growing significance of neo banking in India, customer awareness and adoption remain evolving areas requiring systematic investigation. This study, titled "Study on Neo Banking Adoption by Banking Customers," examines customer awareness, usage patterns, satisfaction levels, and the key factors influencing adoption intention of neo banking services. Grounded in the Technology Acceptance Model (TAM), the study incorporates Perceived Usefulness, Perceived Ease of Use, and Trust as independent variables influencing Neo Banking Adoption Intention.

Primary data were collected from 200 respondents through a structured questionnaire using convenience sampling. The collected data were analysed using Percentage Analysis, Frequency Analysis, and Partial Least Squares Structural Equation Modelling (PLS-SEM) through SmartPLS 4.1.1.8. The findings reveal that 59% of respondents are aware of neo banking services, while mobile banking emerged as the most preferred channel (58%). Currently, 31% of respondents use neo banking platforms, with an additional 14% intending to adopt them in future. The PLS-SEM analysis confirmed that all three constructs — Perceived Usefulness (β = 0.245), Perceived Ease of Use (β = 0.273), and Trust (β = 0.444) — positively and significantly influence Neo Banking Adoption Intention, with Trust emerging as the strongest predictor. The structural model achieved an R² value of 0.788, indicating that the three predictors collectively explain 78.8% of the variance in adoption intention. The measurement model demonstrated excellent reliability and strong convergent and discriminant validity across all constructs. The study concludes that strengthening customer trust, improving user experience, and expanding awareness campaigns are critical for accelerating neo banking adoption in India.

Recommended Citation

V, Sree Bhoojitha and N S, Vishnucharan (2026) "Neo Banking Adoption among Banking Customers: An Empirical Study Using PLS-SEM," Journal of Global Management Research: Vol. 1: Iss. 2, Article 7.
Available at: https://knowledgeconnect.sastra.edu/jgmr/vol1/iss2/7