Impact of Artificial Intelligence-Based Security Mechanisms on Customer Trust in Fintech Services: A Perceptual Study in Karnataka

The rapid growth of Financial Technology (FinTech) services has transformed the financial
ecosystem by enabling fast, convenient and Technology-driven financial transactions. However,
increasing dependence on Digital Financial platforms has intensified concerns regarding
cyber fraud, privacy breaches and transaction Security. Artificial Intelligence (AI)-based
Security mechanisms such as biometric authentication, fraud detection systems, predictive
analytics and real-time Cyber Security monitoring are increasingly implemented to strengthen
Customer Trust and ensure secure Digital Financial transactions. In this context, the present
study examines the impact of AI-based Security mechanisms on Customer Trust in FinTech
services in Karnataka. The study adopts a descriptive and analytical research design using
primary data collected from 300 FinTech users through a structured questionnaire. Statistical
tools such as descriptive statistics, reliability analysis, correlation, regression and Structural
Equation Modeling (SEM) were employed for analysis. The findings reveal that AI-driven fraud
detection, biometric authentication, Perceived Cyber Security, privacy protection and system
reliability significantly influence Customer Trust and continuance intention. AI-based fraud
detection emerged as the strongest predictor of Customer Trust. The study concludes that
effective implementation of AI-enabled Security systems enhances user confidence and
promotes sustainable FinTech adoption. The research provides valuable insights for FinTech
companies, policymakers and regulators in strengthening secure Digital Financial ecosystems
in Karnataka