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Understanding Gen Z Consumers’ Behaviour in Digital Banking Adoption: An Empirical Study

Author

Listed:
  • Mohammad Tahir Zainuddin

    (Islamic Business and Management Research Cluster, Islamic Finance and Wealth Management Institite (IFWMI), Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia (USIM), Nilai, 71800)

  • Wan Nur Fazni Wan Mohamad Nazarie

    (Islamic Business and Management Research Cluster, Islamic Finance and Wealth Management Institite (IFWMI), Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia (USIM), Nilai, 71800)

  • Ratna Roostika

    (Faculty of Business and Economics, Universitas Islam Indonesia (UII), Yogyakarta, 55283)

  • Nofrizal Nofrizal

    (Faculty of Economics and Business, Universitas Lancang Kuning, Pekanbaru, Riau 28266)

Abstract

Digital banking services are increasingly popular among the tech-savvy Gen Z population. This research explores the factors affecting digital banking adoption rates among Generation Z, a group known for their digital prowess and increasing prominence in the banking industry. Despite their tech-savviness, there is still a need to better understand the factors determining their adoption behaviour, especially in emerging markets like Malaysia. Drawing on the Technology Acceptance Model (TAM), this study seeks to understand the impact of individual knowledge, perceived usefulness, perceived benefits, trust and security risk management on Gen Z's digital banking adoption intention. This study adopted a quantitative approach with 302 respondents, aged 18 to 27. Questionnaires distributed through physical and electronic means were used for data collection. Using IBM SPSS Statistics 32.0 software, descriptive statistics, reliability test, correlation and multiple regression analysis were performed to assess the relationships between variables. The findings indicate that individual awareness is the best predictor of digital banking adoption, followed by perceived usefulness, perceived benefits and security risk management. The variables are strongly connected with the adoption intention. Surprisingly, trust did not prove to be statistically significant, which means that Gen Z might be less interested in trust factors, and more in convenience and usefulness. The model has high explanatory power, with 97.2% of the variance in adoption explained, suggesting that the model is very robust. Overall, the research shows that increasing awareness, usefulness, and perceived benefits, and security risk management are key to encouraging Gen Z to adopt digital banking. The results offer valuable theoretical and practical insights for banks and policymakers to enhance digital banking adoption by this demographic population.

Suggested Citation

  • Mohammad Tahir Zainuddin & Wan Nur Fazni Wan Mohamad Nazarie & Ratna Roostika & Nofrizal Nofrizal, 2026. "Understanding Gen Z Consumers’ Behaviour in Digital Banking Adoption: An Empirical Study," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 10(5), pages 189-203, May.
    • Handle: RePEc:bcp:journl:v:10:y:2026:i:5:p:189-203
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    References listed on IDEAS

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