The value of technology in service encounters: Exploring consumer perceptions of biometric access at automatic teller machines

Sookeun Byun, Purdue University

Abstract

To gain competitive advantage in the market, several retail banks have recently started to deploy biometric technologies in their service encounters. Biometrics is an emerging technology that authenticates individuals using their unique physical characteristics. While the application of biometrics is expected to increase security of a certain physical or logical area, this new technology seems to engender various consumer concerns. This study aimed to understand consumers' value perception of using biometric technology, in particular fingerprint recognition technology at ATMs. Following the utilitarian approach to define consumers' value, perceived benefit and perceived risk were measured as a "get" component and a "give" component, respectively. The levels of trust in a bank and personal innovativeness were also measured as constructs that may influence individuals' value judgment of using the new technology. The perceived benefit and the perceived risk were hypothesized as multi-dimensional constructs and measured by formative indicators. Specific dimensions of those two molar constructs were determined based on informal personal interviews as well as reviews of extant literature. To validate the research model of this study, an empirical study was conducted with an Internet survey. Customers' e-mail addresses were randomly selected from the database of the bank that deployed fingerprint recognition technology for its ATMs. A total of 563 usable responses were collected, which include 307 current users of the technology. Partial Least Squares (PLS) with a bootstrapping procedure was used to test proposed hypotheses. The research model was tested with the whole sample, current adopters, and potential adopters. The analysis revealed that consumers' value was a good predictor of behavioral intention to use the technology while the value was mainly determined by perceived benefit rather than perceived risk. The banking customers perceived benefits of using fingerprint recognition technology at ATMs due to perceived enjoyment, increased security, time convenience, and cognitive-effort saving. Different risk sources were associated for current adopters and potential adopters (non-adopters): while performance risk was the most salient but unique risk source perceived by potential adopters, current adopters were concerned about information privacy risk and financial risk as well. Understanding what attracts or inhibits consumers from using such a new technology-embedded service would enable businesses to evaluate the technology from their customers' perspectives and develop effective marketing strategies. This study concludes with discussion on the use of formative and reflective indicators, limitation, and direction for future research.

Degree

Ph.D.

Advisors

Feinberg, Purdue University.

Subject Area

Marketing|Banking

COinS