Study on Behavioural Aspects of Customer for the Adoption of Neo Banking in India: An Empirical Study with Respect to Convenience Trust Satisfaction and Financial Inclusion

Abstract

The rapid expansion of digital financial services in India has significantly transformed the banking landscape, with neo-banks emerging as a prominent alternative to traditional brick-and-mortar banking institutions. Driven by increased smartphone penetration, internet accessibility, and supportive regulatory initiatives, neo-banking platforms offer technology-driven, branchless financial solutions tailored to evolving consumer expectations. This study empirically investigates the key determinants influencing customer adoption of neo-banking services in India, with particular emphasis on convenience, trust, customer satisfaction, and financial inclusion.

Primary data for the study were collected through a structured questionnaire administered to both existing users and potential users of neo-banking services across selected urban and semi-urban regions of India. The sample captures diverse demographic and socioeconomic profiles, enabling a comprehensive understanding of adoption behavior in varying contexts. The collected data were analyzed using statistical techniques such as reliability analysis to ensure internal consistency of measurement scales, correlation analysis to examine interrelationships among variables, and multiple regression analysis to assess the impact of selected determinants on customer adoption intentions.

The empirical findings indicate that convenience is a dominant factor influencing the adoption of neo-banking services. Features such as seamless digital account opening, intuitive and user-friendly mobile interfaces, real-time transaction processing, and round-the-clock service availability significantly enhance user acceptance. Trust also emerges as a critical determinant, particularly with respect to data security, privacy protection, regulatory compliance, and the reliability of digital transactions. The study further reveals that customer satisfaction plays a mediating role between service attributes and continued usage intention, suggesting that positive user experiences strengthen long-term engagement with neo-banking platforms.

Additionally, the study highlights the role of neo-banking services in advancing financial inclusion by lowering entry barriers to formal banking, especially for underbanked and digitally underserved populations. By offering cost-effective, accessible, and paperless financial solutions, neo-banks contribute to expanding the reach of formal financial services in India. The findings of this study provide valuable insights for fintech companies, traditional banks, and policymakers in designing user-centric, secure, and inclusive digital banking strategies. Overall, the study underscores the importance of trust-building measures, service quality enhancement, and inclusive innovation in fostering sustainable growth of neo-banking services within India’s digital financial ecosystem.