The Role of Infrastructure and Regulation in Shaping Digital Banking Acceptance: The Mediating Effect of Societal Trust

Abstract

The rapidly growing usage of digital banking has highlighted the need to understand the determinants of the infrastructure-based and regulatory factors that contribute to the acceptance of the populace. The aim of this study is to examine how digital infrastructure development and national and international regulatory frameworks influence the acceptability of digital banking and how collective societal trust works as a mediating force. A survey on 367 banking customers in Pakistan was done using a structured questionnaire and analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results showed that the development of the digital infrastructure has a strong positive influence on the acceptability of digital banking, but national and international regulation have a negative and statistically significant direct effect (beta = -0.065, p < 0.001). These relationships are mediated by collective societal trust that transforms the variables needed to build infrastructure and the regulatory effects into the increased confidence and adoption behavior. Altogether, the findings emphasized the essentiality of trust-building policies and the creation of strong digital ecosystems. However, the investigation is restricted by the fact that it is country-specific and cross-sectional, which means that future research ought to be based on longitudinal and multinational comparison in order to validate and extend the results.