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The Use of Financial Apps: Privacy Paradox or Privacy Calculus?

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Listed:
  • Hans Brits
  • Nicole Jonker

Abstract

This paper examines whether the ‘privacy paradox’, i.e. a dichotomy between privacy intentions and privacy behaviours, is visible amongst users of financial services apps. Using a survey among Dutch consumers, we study to what extent people share financial data with third parties, and whether their data sharing activities are in line with their privacy concerns. We find that paradoxical usage of financial apps as measured by the privacy paradox metric is low, most users seem to make a rational calculation of benefits versus privacy risks. Paradoxical non-usage is substantial. This could be an efficiency issue, but is not a problem from a risk perspective. Regression analysis shows that app usage correlates positively with its perceived benefits and negatively with privacy risks. Furthermore, usage of certain types of apps depends on people’s trust in the app providers. Overall, the results point to privacy calculating behaviour amongst the users of the data sharing apps in this study rather than to paradoxical behaviour.

Suggested Citation

  • Hans Brits & Nicole Jonker, 2023. "The Use of Financial Apps: Privacy Paradox or Privacy Calculus?," Working Papers 794, DNB.
    • Handle: RePEc:dnb:dnbwpp:794
    as

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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Financial apps; Consumer choice; Discrete Choice Modelling; Metric; Personal Data; Privacy Calculus; Privacy Paradox; PSD2; Westin Index;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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