Factors Affecting User Retention of Mobile Mutual Fund Investment Applications: Evidence from Indonesia

Abstract

Mutual fund is one of the most popular investment programs, especially among small investors. Currently, many mobile-based applications are available, facilitating the buying and selling of mutual funds. This number of choices creates competition between application developers, pressuring them to find ways to maintain user loyalty by increasing user retention rates. However, only a few studies have currently discussed user retention in mutual fund investment applications. Furthermore, previous studies never examined the quality factor of the application but instead focused more on other factors outside the application. This study analyzed the factors influencing user retention on mutual fund investment applications in Indonesia from the application’s quality and usability aspects. This study was based on the expectation-confirmation model (ECM) as the underlying theory. Data were collected using a survey questionnaire resulting in 414 responses, which were then processed and analyzed using the covariance-based structural equation modeling (CB-SEM) technique. The results of this study indicate that three variables can directly affect user retention in mutual fund investment applications: satisfaction, perceived usefulness, and perceived enjoyment. The satisfaction variable had the most significant influence of these three variables. Several factors influenced satisfaction: perceived usefulness, enjoyment, ease of use, trust, confirmation, prompt response, and security.