Digital Financial Literacy and User Trust as Predictors of Mobile Banking Adoption: Evidence from Pakistani Retail Customers

Abstract

The rapid expansion of mobile banking in Pakistan offers a pathway to greater financial inclusion, yet user hesitancy continues to hinder adoption. This study examines how digital financial literacy, user trust, perceived security, social influence, and facilitating conditions collectively influence behavioral intention toward mobile banking. A structured questionnaire was administered to 412 retail banking customers in major Pakistani cities. Using confirmatory factor analysis and structural equation modeling, results reveal that digital financial literacy, trust, and facilitating conditions significantly predict mobile banking adoption, while perceived security indirectly affects intention through trust. Social influence also demonstrates a positive role, although weaker compared to capability-driven factors. The findings highlight that adoption is shaped not only by technical infrastructure but by user confidence and social legitimacy. Policy and managerial implications include targeted literacy programs, transparent data-security communication, and improved customer support services. This study contributes to UTAUT2-based fintech research within emerging economies by integrating trust as a central mechanism for adoption behavior.