Information Technologies and FinTech Adoption: Investigating the Moderating Role of Digital Transformation

Abstract

Purpose. This study explores the impact of information technologies on FinTech adoption and tries to explore the moderating effect of digital transformation on the strength of this relationship. The framework incorporates antecedent constructs of IT infrastructure capability, IT security and data privacy and the dependent construct of FinTech adoption with the contingent boundary condition of digital transformation. Design/methodology/approach. The research is quantitative with a cross-sectional design that is assisted by comprehensive literature review and expert consultation. The data were gathered using a structured questionnaire to 384 banking professionals, FinTech executives and IT managers from commercial banks, digital banks and FinTech companies. To assess the measurement and structural model and to test the direct and moderating relationships between the constructs, descriptive statistics, confirmatory factor analysis, and structural equation modeling (SEM) using SmartPLS were used. Findings. The findings have shown that information technologies have a positive and statistically significant effect on FinTech adoption, with the capability of IT infrastructure being the most influential direct antecedent, followed by IT integration capability and IT security and data privacy. The positive moderation effect of digital transformation is more evident between information technologies and FinTech adoption as digital transformation intensity increases, with the focal relationships becoming more significant. The structural model shows high predictive power with an R square of 68.4 percent on the level of FinTech adoption. Practical implications. The results help banking and FinTech companies understand how to use their IT investments to support their FinTech adoption goals. IT infrastructure, security architecture and integration capability should be considered as a package of decisions and the organization should strive to build the right maturity to support the expansion of returns from IT investments in order to drive digital organizational transformation. Originality/value. The study adds to the existing literature of IT related to the adoption of FinTech, adding the dimensions of IT capability as a ‘contingent boundary condition' within the context of digital transformation. It contributes to the literature with two findings: digital transformation amplifies the adoption return of information technologies and banking executives, FinTech founders, and regulators can draw insights from it to drive FinTech diffusion faster.