Online fraud risks and its impact on customer trust in digital financial services.

This study examined whether perceived online fraud risk influences customer trust in digital financial services among students in a university in Cebu City, Philippines. As young adults increasingly depend on e-wallets and mobile banking for daily transactions, understanding how fraud awareness shapes their trust is essential. A quantitative correlational design was employed, and a Likert-scale survey was administered to 310 students. The instrument demonstrated acceptable reliability (Cronbach’s α = 0.778). Results showed that students perceive online fraud as a serious and growing threat (M = 3.37), yet their trust in digital financial platforms remained moderately positive (M = 2.92). Simple linear regression revealed that perceived online fraud risk does not significantly predict customer trust (R² = 0.003, p = 0.34), indicating that fraud awareness explains almost none of the variation in trust. These findings suggest that students rely on functional trust—driven by convenience, usability, and platform performance—rather than on perceived safety. Despite high-risk awareness, students continue to use digital financial services because these platforms remain essential to daily life. The study highlights the need for service providers to strengthen platform reliability, user experience, and customer support, as these factors appear more influential in sustaining trust than perceived fraud risk alone. Future research should examine additional predictors of trust, including user satisfaction, digital literacy, and actual fraud experience, and consider longitudinal designs to track how trust evolves in changing digital environments.