A Study of Digital Banking Usage Intentions inHong Kong based on Consumer Characteristics

Virtual banks, also known as neobanks, challenger banks, digital banks, or online-only banks, have rapidly developed globally and in Asia. Since their inception in Hong Kong nearly four years ago, user numbers have reached 2.2 million. However, these banks face fierce competition and numerous challenges. This study aims to explore the impact of system quality, interface design, security assurance, service quality, utilitarian expectations, word-of-mouth, brand image, reward systems, and consumer characteristics on the adoption intentions of virtual banks in Hong Kong, seeking to uncover new insights. Utilizing a triangulation method, the study combines a literature review, focus groups, a small pre-test survey, and a large-scale survey to gather both qualitative and quantitative data. A total of 259 valid questionnaires were collected using the snowball sampling method and analyzed with SPSS for correlation analysis. The results indicated that all eight hypothesized factors showed significant relationships and four notable differences were found in consumer characteristics. The research revealed that many citizens misunderstand or are concerned about the safety and stability implied by the term “Virtual” in virtual banks. It is recommended that related institutions consider changing the term “Virtual” in virtual banks to something like “Licensed Digital Bank.” Additionally, it is suggested to enhance promotional efforts through comprehensive communication strategies to increase public awareness and confidence in the safety, stability, and deposit protection of virtual banks. Optimizing the banks’ unified user interface can improve customer experience, enhance brand competitiveness, and yield benefits that exceed costs. Furthermore, increasing account opening rewards to attract new users and adding reward tiers to boost user activity and loyalty are recommended.