Home⇛International Journal of Multidisciplinary: Applied Business and Education Research⇛vol. 6 no. 8 (2025)

Behavioral Economics Behind Digital Banking Adoption and Retention in the Philippines

Brix Refil Arriola

Discipline: Economics

 

Abstract:

The account ownership in digital-only banks has marked a signifi-cant growth since the Bangko Sentral of Pilipinas (BSP) has exclu-sively segmented these banks apart from the traditional ones in No-vember 2020. This warrants the probe on the behavioral economics behind digital banking adoption and retention in the Philippines to examine how cognitive biases play in one’s decision to use and con-tinually patronize digital-only banks. Grounded on Prospect Theory, Technology Acceptance Model (TAM) and Psychological Ownership Theory, the researcher adminis-tered survey questionnaires to 385 Filipino users of the digital-only banks. Descriptive-correlational research has been employed with the use of robust statistical testing such as PERMANOVA and Spear-man’s rho. The findings of the study reveal that young, predominantly female, college-educated, lower- to middle-income adults characterized the primary adopters, though their engagement remained tentative. Be-havioral constructs, adoption and retention drivers consistently drew neutral responses, suggesting cautious acceptance rather than enthu-siasm. However, behavioral factors strongly influenced younger, self-employed, and lower-income users, whereas higher earners and those with higher educational attainment relied more on logical eval-uation, financial benefits, and product-specific features, indicating varying motivations shaped by demographic intersections. This outcome calls for a more tailored customer experience so Fil-ipinos can be enticed to adopt and retain digital banking services ra-ther than a one-size-fits-all solution. This behavioral split unearths that some users crave control and confidence whilst the other seek connection and ease. Implications and recommendations have been provided in the end to help further the adoption and retention of dig-ital banking services in the Philippines.



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