Management Journal for Advanced Research

exemplified by platforms like M-Pesa that seamlessly integrate banking and mobile network operator services (World Bank, 2024). Kenya's success with M-Pesa demonstrates the potential of a well-integrated digital financial ecosystem to drive financial inclusion and economic growth (Mbiti & Weil, 2013). However, systemic obstacles in Zambia, including disjointed regulatory frameworks, infrastructural inequities (with only 38% rural 3G coverage), and usability issues, impede the country's progress towards a cohesive digital finance ecosystem (ITU, 2022). To bridge this gap, Zambia must address these systemic challenges by creating a conducive regulatory environment that fosters innovation while ensuring consumer protection (World Bank, 2020). Investment in digital infrastructure, particularly in rural areas, is essential to bridge the connectivity gap and ensure equitable access to digital financial services (Broadband Commission, 2020). Enhancing the usability of digital platforms through user-friendly interfaces and comprehensive customer support can significantly improve the overall user experience and encourage the adoption of advanced financial services (GSMA, 2020).

Furthermore, educational initiatives aimed at increasing financial literacy and digital competence are vital. These initiatives can help users understand and trust digital financial services, thus driving broader and more effective utilization. According to the OECD (2023), financial literacy is a key enabler of financial inclusion, empowering individuals to make informed financial decisions and effectively use financial products and services.

Zambia's financial landscape is at a critical juncture. While the adoption of digital financial services has made significant strides, there is a clear need for strategic interventions to convert this adoption into comprehensive usage. By addressing the identified barriers and drawing lessons from successful models like Kenya's M-Pesa, Zambia can enhance its digital financial landscape, promote greater financial inclusion, and support broader economic development.

Zambia has demonstrated significant progress in embracing digital financial services, but there remains a considerable gap between adoption and full utilization. Table 1.1 shows the Key Statistics on Digital Service Utilization.

network operators among clients in Lusaka.
2. To examine the determinants affecting customer choices for digital services offered by commercial banks compared to mobile network operators.
3. To discover potential for improving the utilization of digital services provided by commercial banks, informed on customer experiences and expectations.

Research Questions

The following research questions guide this study:

1. What are the differences in consumption trends of digital services between Standard Chartered Bank and Mobile Network Operators among customers in Lusaka?
2. What factors affect customer preferences for digital services provided by Standard Chartered Bank in comparison to those provided by Mobile Network Operators?
3. In what ways might the enhancement of digital services offered by Standard Chartered Bank be informed by customers experiences and expectations?

Significance of the Study

This research explores how digital services are consumed by customers of Standard Chartered Bank (SCB) and mobile network providers (MNOs) in Zambia, shedding light on the financial landscape and quest for financial inclusion. The study provides actionable steps for SCB to enhance customer retention and satisfaction, and for MNOs to elevate their service offerings and attract more affluent clients. Policymakers will find the study's evidence-based recommendations invaluable for enhancing Zambia's digital finance ecosystem, while academically, the research fills a significant gap in the literature on digital banking in Sub-Saharan Africa, presenting a tailored SERVQUAL-based framework to empower underserved populations.

2. Literature Review

The concept of Digital Financial services

Digital Financial Services (DFS) have revolutionized the way we manage our finances, making it easier, faster, and more convenient. DFS encompass a wide range of financial services provided through digital means, leveraging technology to offer financial products and services to consumers and businesses (Manyika et al., 2016).

Global Perspectives on Digital Financial Services

Advanced Economies

In developed economies, digital financial services have attained near-universal acceptance, propelled by enhanced infrastructure and customer confidence in technology. Countries such as Sweden and South Korea excel in cashless transactions, with more than 90% of payments executed digitally (World Bank, 2023). These markets prioritize ease and innovation, incorporating features like biometric verification and AI-driven financial planning tools as standard.

Emerging Economies

Conversely, developing economies encounter distinct obstacles, including inadequate infrastructure and insufficient financial literacy. Mobile network operators (MNOs) have significantly contributed to enhancing financial inclusion. Kenya's M-Pesa platform serves as a global standard, with more than 81% of adults utilizing mobile money for peer-to-peer transactions, bill settlements, and savings (GSMA, 2023). In India, the Unified Payments Interface (UPI) has enabled easy interoperability among banks and fintech platforms.

Zambia's Position

Zambia exemplifies numerous attributes of the digital banking sector in Sub-Saharan Africa. Despite mobile penetration surpassing 85%, hardly 32% of adults utilize advanced financial instruments like as loans and investments (BoZ, 2024). This disparity underscores the necessity for integrated solutions that merge the accessibility of Mobile Network Operators with the sophisticated capabilities of commercial institutions such as Standard Chartered Bank.

Sub-Saharan Africa: Regional Trends in Digital Finance

Sub-Saharan Africa has become a global leader in digital financial inclusion, propelled by the swift adoption of mobile money systems and cutting-edge financial technologies. The region's distinctive constraints, such as inadequate banking infrastructure and elevated unbanked populations, have prompted the emergence of mobile network operators (MNOs) as essential contributors to financial service provision.

Interoperability Initiatives: Implementing Ghana's methodology may enhance cross-platform transactions and mitigate inefficiencies.

Investments in Rural Connectivity: Enhancing rural 3G coverage may mitigate the urban-rural gap and augment access to sophisticated financial instruments.

Policy Alignment: Enhancing regulatory frameworks to synchronize bank-MNO activities may cultivate trust and promote adopt

Figure 2.1: Relevance Tree for Regional Trends in Digital Finance

Service Quality Frameworks: Implementation of SERVQUAL and E-SERVQUAL

The quality of service is a crucial factor influencing customer happiness and engagement with digital services. This section employs the SERVQUAL (Parasuraman et al., 1988) and E-SERVQUAL frameworks to assess the service quality of Standard Chartered Bank (SCB) and mobile network operators (MNOs) in Zambia. These frameworks evaluate service quality across five dimensions—reliability, tangibility, responsiveness, assurance, and empathy—while integrating digital-specific concerns such as system availability and privacy under E-SERVQUAL.

Application of SERVQUAL Dimensions to SCB and MNOs

The SERVQUAL framework assesses service quality via five principal dimensions. Table 2.1 delineates the comparative performance of SCB and MNOs across various criteria.

Confidentiality and privacy are essential components of digital financial services. SCB's encryption solutions confer a competitive advantage over MNOs, which are more susceptible to fraud concerns owing to inferior security standards (Davis, 1989). The higher security measures implemented by SCB reassure users about the safety of their financial data and transactions.

In contrast, MNOs face significant challenges in maintaining the same level of security, leading to higher instances of fraud and security breaches (Venkatesh et al., 2003). The integration of confidentiality into the E-SERVQUAL framework highlights the importance of data protection and privacy in building user trust and confidence in digital financial services.

These changes underscore the trade-offs clients encounter between security (SCB) and convenience (MNOs) within Zambia's fragmented digital financial sector (ZICTA, 2024). Principal Insights from SERVQUAL Analysis Security Usability Tradeoff: SCB demonstrates proficiency in assurance, reflecting users' trust in the security and reliability of its services (Parasuraman, Zeithaml, & Berry, 1988). However, it encounters challenges with usability due to intricate interfaces, which impede participation with sophisticated services such as investments or loans.

The complexity of SCB's digital platforms can be a barrier for users who are less tech-savvy or those who prioritize ease of use over advanced functionalities (Davis, 1989). This trade-off between security and usability is a critical consideration for financial institutions aiming to enhance user satisfaction and adoption rates.

Accessibility versus Functionality

MNOs emphasize accessibility via basic USSD platforms, making their services easily accessible to a broad user base, including those in rural areas with limited internet connectivity (World Bank, 2024). However, these basic platforms lack the capabilities required for sophisticated financial instruments, such as investment products or complex loan arrangements. MNOs' focus on accessibility enables them to capture a larger market share in basic transactions, but their limited functionality restricts their ability to compete with traditional banks in offering comprehensive financial services (Venkatesh et al., 2003).

there exists minimal convergence between the policies regulating banks and MNOs. For example:

Agency banking regulations exhibit inconsistency among providers.

Variations in customer data protection policies result in fragmented service offering.

Disparities in Infrastructure: Rural and Urban Inequities

Infrastructure deficiencies intensify policy issues inside Zambia's digital economy. Urban regions possess strong infrastructure, featuring 87% 3G coverage, which facilitates uninterrupted access to SCB’s mobile platforms (BoZ, 2024). On the contrary:

Rural regions have considerable difficulties, with merely 38% coverage, necessitating dependence on MNOs' 65% agent network penetration for fundamental transactions such as cash-in/cash-out services.

Power outages and inconsistent connectivity impede service delivery in rural regions:

• Inadequate network stability results in 24% of transaction failures among Mobile Network Operators (MNOs).
• SCB encounters recurrent application outages during peak times attributable to server capacity limitations.
• Mitigating these inequities necessitates focused investments in last-mile connectivity and renewable energy solutions to enhance digital infrastructure in underprivileged areas.

Cybersecurity Threats

The escalating adoption of digital services in Zambia has precipitated a surge in cybersecurity threats, with social engineering attacks targeting e-wallet users and service providers becoming increasingly sophisticated, posing a significant risk to both banks and mobile network operators (MNOs) (Kshetri, 2013, p. 123). Standard Chartered Bank (SCB) employs advanced encryption technology to mitigate these threats, but encounters usability challenges that frustrate clients, highlighting the trade-off between security and usability (Davis, 1989, p. 985). In contrast, MNO platforms continue to be vulnerable due to inadequate security standards,

Demographic Factors Affecting Digital Service Usage

Demographics significantly influence customer preferences and usage habits for digital services in Zambia. Demographic factors including age, income, gender, and education substantially affect customer interaction with the digital platforms provided by Standard Chartered Bank (SCB) and mobile network providers (MNOs). This section rigorously analyzes these demographic parameters and their influence on digital service usage.

Age as a Determinant of Preferences

Age is a significant determinant affecting digital service preferences. Individuals aged 18 to 35 have a pronounced inclination for MNOs owing to their streamlined interfaces and expedited procedures. Approximately 72% of youngsters prefer the two-step loan applications offered by MNOs over the more intricate five-step processes of SCB (Finscope Zambia, 2024). This inclination corresponds with global trends in which younger people emphasize expediency and convenience over sophisticated features.

Conversely, elderly customers (>45 years) prefer SCB because to its security attributes and sophisticated financial instruments, including payroll processing and investment offerings. This group prioritizes reliability and assurance over convenience of use, indicating a greater aversion to risk in financial transactions.

Income Levels and Service Utilization

Income gaps influence the patterns of digital service consumption. Individuals with high incomes (>ZMW 15,000/month) are more inclined to utilize SCB’s sophisticated financial instruments owing to their perceived dependability and security. For example, 58% of high-income consumers indicate utilizing SCB for payroll processing or savings accounts (Temba, 2024).

In contrast, lower-income demographics depend significantly on MNOs for cost-effectiveness and accessibility. Mobile Network Operators' USSD-based platforms enable customers to execute fundamental transactions such as airtime acquisitions or peer-to-peer transfers without requiring smartphones or internet access. This pricing renders MNOs the favored option for low-income consumers.

Perceived usefulness refers to the degree to which a person believes that using a particular system would enhance their job performance, while perceived ease of use refers to the degree to which a person believes that using the system would be free from effort. In the context of this study, the Expanded Technology Acceptance Model (TAM) extends these concepts to examine the adoption of digital financial services among Standard Chartered Bank (SCB) customers and mobile network operator (MNO) users in Lusaka, Zambia. This model is particularly relevant as it highlights the importance of perceived usefulness and ease of use in driving advanced service adoption. For example, SCB's security features, which received a satisfaction score of 4.2/5, indicate significant perceived usefulness (Davis, 1989). However, 39% of customers identified interface complexity as an obstacle, underscoring the necessity for streamlined workflows similar to MNOs' two-step lending procedures. The Extended TAM is well-suited for this study as it provides a robust framework for understanding the factors influencing users' acceptance and continued use of digital services. Furthermore, the model's emphasis on user perceptions aligns with the study's objective of examining the determinants of customer choices and challenges faced by users of digital financial services.

Digital Service Utilization Framework (DSUF)

The Digital Service Utilization Framework (DSUF) is derived from the SERVQUAL model, developed by Parasuraman, Zeithaml, and Berry in 1988. The SERVQUAL model assesses service quality across five dimensions: tangibles, reliability, responsiveness, assurance, and empathy (Parasuraman, Zeithaml, & Berry, 1988, p. 15). It provides a comprehensive approach to evaluating service quality by measuring the gap between customer expectations and perceptions of service performance. The DSUF adapts the SERVQUAL model to the context of digital financial services, focusing on seven aspects of service quality: reliability, assurance, responsiveness, tangibles, empathy, security, and usability. For instance, SCB's 34% application unavailability during pay transfers underscores dependability deficiencies, while MNOs' security rating of 3.6/5 indicates assurance issues. By evaluating these aspects, the DSUF provides a nuanced understanding of the quality of digital services offered by SCB and MNOs.

while trust-fatigue mediation underscores the compromises customers encounter between security and usability. The independent variables include dimensions of service quality (reliability, security) and technical infrastructure (urban-rural disparities). The dependent variables are depth of utilization (interaction with advanced services) and cross-platform reliance. Moderators include demographic variables such as age, income, and digital literacy proficiency.

Figure 1: Integrated Conceptual Framework for Digital Service Utilization.

Addressed Research Gaps

This study addresses significant research gaps by examining the interaction between banks and mobile network operators (MNOs) in influencing customer experiences in Zambia's digital financial ecosystem. Previous studies have largely focused on banks or MNOs independently, neglecting the impact of demographic variables, regulatory frameworks, and infrastructure inequalities on digital service usage patterns. This research integrates modified SERVQUAL and UTAUT frameworks to assess service quality and demographic preferences across Standard Chartered Bank (SCB) and MNO platforms, providing actionable insights for improving service delivery and promoting financial inclusion in Zambia.

3. Methodology

Research Design

This study used a mixed-methods approach, combining quantitative and qualitative methods to understand how consumers in Lusaka use digital services provided by Standard Chartered Bank (SCB) and mobile network operators (MNOs). This approach allowed for the collection of both numerical data and rich contextual insights. The study's design was pragmatic, focusing on practical solutions to real-world issues. The quantitative component involved structured surveys to gather data on client preferences, satisfaction, and usage trends.

Ethical considerations, such as informed consent and confidentiality, were strictly adhered to throughout the process. The primary data collection tools included questionnaires with closed-ended questions and structured interview guides with open-ended questions to capture comprehensive data on consumer experiences and preferences.

Validity and Reliability

To ensure the validity and reliability of the data collection tools, several measures were taken. For the questionnaires, a pilot test was conducted with a small sample of participants to identify and rectify any issues with the questions or response options. The reliability of the questionnaires was assessed using Cronbach's alpha, which indicated a high level of internal consistency. The structured interview guides were reviewed by experts in the field to ensure the questions were clear and relevant to the research objectives. Triangulation was used to enhance the validity of the findings by comparing data from multiple sources and methods.

Data Analysis Plan

The data analysis plan involved both quantitative and qualitative analysis techniques. Quantitative data from the questionnaires was analyzed using statistical methods, such as descriptive statistics, correlation analysis, and regression analysis, to identify patterns, correlations, and disparities in client engagement with SCB and MNO services. Given that the data was not normally distributed, ANOVA (Analysis of Variance) and chi-square tests were also employed to further explore the relationships and differences between variables.

Qualitative data from the interviews was analyzed using thematic analysis, which involved coding the data and identifying key themes and patterns in consumer experiences, issues, and expectations. The results from both analyses were integrated to provide a comprehensive understanding of the research objectives.

Ethical Consideration

The research observed main ethical issues including, voluntary nature of participation, obtaining of informed consent; ensuring confidentiality and privacy of participants, institutional ethical issues, which included obtaining authority to conduct research and scientific honesty (Fleming, 2011).

Most respondents hold a Bachelor's degree (36.5%), followed by those with a Master's degree (26.6%) and a Diploma (21.3%), showing that respondents are generally well-educated, which may positively impact their engagement with digital financial services. The employment status indicates that the majority of respondents are employed (66.3%), followed by self-employed individuals (25.2%), suggesting that working individuals are the primary users of digital financial services in Lusaka. The distribution of monthly income ranges among respondents shows a significant portion (39.4%) with an income above 15,000 ZMW, followed by 17.4% in the 6,001-10,000 ZMW range and 14.5% in the 10,001-15,000 ZMW range, indicating a diverse range of income levels with a notable segment earning higher incomes. This table summarizes the demographic characteristics of the respondents, including age group, gender, education level, employment status, and income range. The data indicates that the majority of users of digital financial services in Lusaka are aged 26-45, predominantly male, well-educated, and mostly employed. The income distribution shows a diverse range of income levels, with a significant portion earning above 15,000 ZMW.

Usage Trends of Digital Financial Services Among Clients

How Often Do You Use Digital Financial Services?

The frequency of digital financial service usage among respondents reveals that a majority (53.2%) engage with these services daily, followed by 22.7% who use them weekly. A smaller portion uses digital services monthly (13.1%), rarely (9.2%), or never (1.8%).

Which Digital Financial Services Do You Primarily Use?

The most commonly used digital financial services are provided by mobile network operators (MNOs) (39.7%) and the SCB App (36.2%).

Challenges Faced While Using SCB Digital Financial Services

Respondents face various challenges while using Standard Chartered Bank's digital financial services, with the most common issues being complexity (9.6%), security concerns (12.8%), and lack of awareness (11.7%). Poor customer service is also a significant challenge for 9.6% of respondents, while 2.5% report high costs and 2.8% experience unreliable services. Additionally, 21.6% of respondents report no challenges. These challenges highlight areas for improvement, such as enhancing user-friendliness, security measures, customer support, and service reliability.

Challenges Faced While Using MNOs Digital Financial Services

Respondents face various challenges while using digital financial services provided by mobile network operators (MNOs), with the most common issues being network failures (16.0%), complexity of use (8.9%), and security concerns (11.3%). Poor customer service is also a significant challenge for 8.2% of respondents, while 2.8% report high costs and 4.6% experience transaction delays. Additionally, 9.6% of respondents find the services unreliable, and 22.3% report no challenges. These challenges highlight areas for improvement, such as enhancing network reliability, user-friendliness, security measures, customer support, and service reliability.

Chi-Square Results

5. Discussion of Results

This chapter provides an in-depth discussion of the study's findings, focusing on the usage trends of digital financial services provided by Standard Chartered Bank (SCB) and mobile network operators (MNOs) among Lusaka customers. This chapter thus, interprets the results in the context of the study's objectives, providing a comprehensive analysis of the usage trends, determinants of customer choices, and challenges faced in the utilization of digital financial services among Lusaka customers.

Usage Trends of Digital Services

The analysis of usage trends revealed that mobile network operators (MNOs) are the most frequently used digital financial services providers among respondents in Lusaka, with 39.7% indicating a preference for MNOs such as MTN Mobile Money and Airtel Money. This finding aligns with previous studies which have highlighted the growing popularity of MNOs in providing accessible and convenient financial services (UNCDF, 2023). The high daily usage rate (53.2%) of digital financial services further underscores the reliance on these services for everyday transactions. According to GSMA (2023), mobile money services have been pivotal in enhancing financial inclusion in sub-Saharan Africa, making financial services accessible to unbanked populations.

In comparison, Standard Chartered Bank (SCB) also enjoys significant usage, with 36.2% of respondents using the SCB App and its variants. This suggests that while MNOs dominate basic financial transactions, SCB is still favored for more complex and secure financial services. This finding is consistent with the Bank of Zambia (2024), which reported that commercial banks are preferred for advanced financial products such as savings accounts and loans.

Security concerns (12.8%) were also a significant challenge, reflecting broader trends in digital finance where users demand robust security measures. Deloitte (2023) emphasized that addressing security vulnerabilities is essential for fostering trust and encouraging wider adoption of digital financial services. The chi-square test results indicated a significant association between the frequency of usage and the type of service provider (p-value < 0.001). This highlights the need for SCB to enhance the usability and accessibility of its digital services to compete effectively with MNOs. Respondents indicated that improved user experience (15.2%), better security (12.8%), and enhanced customer support (9.2%) would encourage more frequent use of SCB's digital financial services. This aligns with recommendations from the World Bank (2024), which emphasized the need for user-centric designs and comprehensive customer support in digital banking. Additionally, Forrester (2023) suggested that banks should invest in digital innovation and customer engagement to remain competitive in the evolving financial landscape. All in all, this study provides valuable insights into the usage trends, determinants of customer choices, and challenges faced by users of digital financial services in Lusaka. While MNOs currently dominate the market, there is significant potential for commercial banks like SCB to enhance their digital offerings and increase user adoption. Thus, by addressing the identified challenges and implementing the recommended strategies, SCB can play a pivotal role in advancing financial inclusion and improving the digital financial landscape in Zambia.

6. Conclusion and Recommendations

Conclusion

This study explores the use and challenges of digital financial services in Lusaka, Zambia. It found that people often rely on services provided by mobile network operators (MNOs) like MTN Mobile Money and Airtel Money due to their accessibility and convenience. Standard Chartered Bank (SCB), while less frequently used, remains important for secure and complex transactions. Convenience was the main reason people choose digital financial services, with security and ease of use also being significant factors.

Recommendations for Future Studies

Future studies should consider expanding the geographic scope beyond Lusaka to include other urban and rural areas in Zambia. This broader perspective will provide a more comprehensive understanding of digital financial service usage and its impact on financial inclusion across different regions. Conduct longitudinal studies to track changes in digital financial service adoption and usage over time. This approach will help identify trends, measure the effectiveness of interventions, and understand how user behaviors and preferences evolve.

Conduct comparative studies between different financial service providers, including both traditional banks and fintech companies. This will provide insights into the competitive landscape and highlight best practices and areas for improvement

Author Contributions: S.T. was responsible for conceptualization, methodology, writing review and editing, and analysis. B.G.M.M. handled the article editing.

Funding: No funding was provided for this research. The authors have no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed. No writing assistance was utilized in producing this manuscript.

Institutional Review Board Statement: The University of Zambia Humanities and Social Sciences Ethics Committee approved this study.

Informed Consent Statement: Not applicable.

Data Availability Statement: The datasets used during the current study are available from the corresponding author upon reasonable request.

Acknowledgements: I am deeply grateful to Dr. B. G. M. Mwanza for her unwavering support and supervision during both the preparation of the proposal and the writing of this dissertation. I also want to sincerely thank my wife, colleagues, whose words of encouragement, affection, and prayers have been a source of strength and inspiration throughout my academic journey. Last but not least, I thank my Lord God Almighty for the rare opportunity given to me to accomplish my dream of acquiring my Master of Science degree in operations, project and supply chain management.

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