An Empirical Study on Neo Banking Adoption in India: Convenience Factors, Trust, Demographics, and Financial Inclusion

Abstract

The rapid growth of financial technology has led to the emergence of neo banks, which operate as fully digital and branchless banking institutions. In the Indian context, neo banking has gained significant attention due to its potential to enhance customer convenience, trust, and financial inclusion. The present study aims to empirically examine the factors influencing the adoption of neo banking services in India, with a specific focus on convenience factors, customer trust, demographic characteristics, and their role in promoting financial empowerment.

The study investigates the impact of various convenience factors—such as ease of access, time efficiency, cost-effectiveness, and digital usability—on consumers’ intentions to adopt neo banking services. It further examines how trust, satisfaction, and perceived service quality influence the transition from traditional banking to neo banking. Additionally, the study analyzes the role of demographic variables, including age, gender, income, and educational background, in shaping the acceptance and usage patterns of neo banking services. The research also explores the contribution of neo banks to financial inclusion initiatives in India.

A quantitative research design was adopted, and primary data were collected through a structured questionnaire administered to users and potential users of neo banking services across selected regions in India. Statistical tools such as descriptive analysis, reliability testing, and inferential techniques were employed to test the hypotheses and analyze the relationships among variables. The findings reveal that convenience factors have a significant impact on consumers’ intentions to adopt neo banking for financial empowerment, thereby leading to the rejection of the null hypothesis and acceptance of the alternative hypothesis. The study further indicates that trust and perceived service quality play a crucial role in enhancing customer satisfaction and adoption rates.

The results of this research provide valuable insights for policymakers, fintech firms, and banking institutions to design customer-centric digital banking solutions that strengthen trust, improve convenience, and support financial inclusion in India.