The emergence of fintech has made it possible for many unbanked individuals worldwide to obtain financial services through digital means. Recently, the COVID-19 health crisis has opened up new possibilities for digital financial services to speed up financial inclusion despite social exclusion. Many national governments have promoted its usage by lowering costs and boosting the transactional limits for digital transactions. In this research, the authors attempted to construct a model for the adoption of fintech in the context of rural India. The goal of this research is to identify the policies and initiatives that best promote the growth of the fintech ecosystem. They also make an effort to pinpoint the qualities of banking systems that are more likely to support fintech in order to collaborate effectively on financial inclusion. The methodology section of this work is built on the ISM-MICMAC technique.
TopIntroduction
Fintech is transforming how financial services are provided to low-income people and small enterprises (Demir, Pesqué-Cela, Altunbas, & Murinde, 2022; Ozili, 2018). Banks and their representatives, microfinance organisations, and informal systems have traditionally provided financial services; these sectors are often subject to be less competitive (Vo et al., 2021; Kling et al., 2020). However, they mostly rely on in-person interactions with financial service providers and cash transactions. These discussions serve as the foundation for credit monitoring and often serve as a means for individuals to acquire financial literacy (Morgan & Long, 2020; Lusardi & Mitchell, 2011). Although this situation is being changed by the introduction of fintech: with the creation of digital financial instruments accessible via computers or mobile devices, and hence, the need for face-to-face contact has significantly decreased (Haddad & Hornuf, 2019; Kurniasari et al., 2021). Basically, digital advancements and business model developments in the financial industry that are enabled by technology are included in fintech. These technologies have the potential to fundamentally alter the way that businesses today produce and distribute their goods and services, develop traditional industry structures, dissolve industry boundaries, encourage entrepreneurship, offer new financial entry points, and democratise access to financial services.
Researchers, practitioners, and policy makers all need to be aware of recent advancements in financial innovation and the advances in financial inclusion that have followed (Kurniasari et al., 2021; Krishna Priya & Anusha, 2019). Therefore, this study examines the enablers related to current financial innovations to find out how they affect various stakeholders, mainly those who were previously unbanked in terms of access to financial services. The population in developing countries who are bankable and unbanked has grown over the last ten years as a result of financial innovation in the shape of new distribution channels, products, and providers. On the other side, it may also be seen as new technology-driven companies that want to take on established financial institutions in the provision of financial services (Noreen et al., 2022; Joia & Cordeiro, 2021). In a broader sense, the term “fintech” refers to technological advancements in the financial services industry that are frequently linked to new business models, service providers, processes, and products. All of these developments have the potential to materially affect how financial services are provided, whether by market leaders or by up-and-coming players.
The remaining sections of the essay are organised as follows. The emphasis of the next part is on the historical context and the most recent wave of financial innovations that have benefited financial inclusion. The approach is covered in Section 3 together with expert mining and ISM-MICMAC. The ISM model, its results, and how they affect the economy are covered in Section 4. Theoretical and practical consequences are discussed in Section 5; conclusions are made in Section 6, along with suggestions for further research outcomes.