Bridging Digital Innovation and Financial Inclusion: A Behavioral Study of FINTECH Adoption in Pakistan

Abstract

The paper will examine the impact of FINTECH innovation on financial services in Pakistan on consumer adoption behaviour, financial inclusion and institutional issues. This study aims to determine the impacts of technology, including mobile banking, digital wallets and online payment systems in changing the conventional banking environment and solving the problem of financial exclusion. A quantitative research design was adopted, with primary data collected via structured questionnaires administered to 385 respondents. The data were processed to determine the relationships among perceived usefulness, ease of use, trust, consumer adoption, and financial inclusion using Partial Least Squares Structural Equation Modelling (PLS SEM). The results indicate that perceived usefulness (β = 0.346, p < 0.05) and trust (β = 0.308, p < 0.05) have a significant impact on consumer adoption, whereas ease of use has a partially significant impact (β = 0.179, p = 0.062). Moreover, trust has a significant influence on financial inclusion (β= 0.456, p < 0.05). The model shows a relative explanatory power, with R2 of 0.500 and 0.432 for consumer adoption and financial inclusion, respectively. Despite growing adoption rates, cybersecurity issues and regulatory limitations are also major obstacles. This research offers important implications for policymakers, financial institutions, and FINTECH companies, as it identifies critical forces and obstacles to the adoption process. It adds to the literature by providing empirical evidence from Pakistan and proposing future research directions, including regulatory frameworks and improvements in digital literacy.