Research Article: 2025 Vol: 29 Issue: 5S
Sanjay Pareek, Indian Institute of Management, Sirmaur, Himachal Pradesh
Sana Maidullah, Indian Institute of Management, Sirmaur, Himachal Pradesh
Vivek Soni, Faculty of Management Studies, University of Delhi
Citation Information: Pareek, S., Maidullah, S., & Soni, V. (2025). Challenges and opportunities in the adoption of fintech in emerging markets. Academy of Marketing Studies Journal, 29(S5), 1-16.
The FinTech business has demonstrated disruptive potential for altering global financial services, particularly in emerging markets. These economies, although providing great prospects for financial inclusion and technological innovation, also face considerable constraints such as inadequate infrastructure, regulatory inconsistency, and low consumer trust. This article explores the constraints and prospects for FinTech adoption in emerging economies by looking at legal frameworks, technology literacy, financial access, and economic development. Using a sample of 253 respondents from an emerging economy, this study uses a mixed-method approach to investigate the dynamics of FinTech adoption. The findings show that, while emerging markets are primed for FinTech growth, they must overcome barriers such as regulatory uncertainty and digital illiteracy to reach their full potential. Furthermore, investments in digital infrastructure and technology literacy programs are critical to accelerating FinTech adoption in emerging nations.
FinTech, Emerging Markets, Financial Inclusion, Innovation, Regulation, Challenges, Opportunities.
The FinTech business has demonstrated disruptive potential for altering global financial services, particularly in emerging markets. The quick digitalization of financial services has many advantages for emerging markets, such as increased service delivery, increased financial inclusion, and increased economic engagement. These markets do, however, also confront unique difficulties, including unclear regulations, a lackluster technology foundation, and low financial awareness. Emerging markets are characterized by a wide range of financial needs, with a large number of people having access to mobile phones but not conventional banking services. FinTech can therefore close this gap by utilizing latest including blockchain, digital payments, and mobile banking services. This paper's main goals are to pinpoint the obstacles to adoption of FinTech and investigate the ways in which these markets might benefit from the opportunities that FinTech presents.
Regulation and FinTech
For digital financial ecosystems to flourish and evolve sustainably, especially in emerging nations, regulation and FinTech must coexist. The dynamic function of regulators in this domain has been attracting heightened interest from both academics and decision-makers. The significance of a well-balanced regulatory environment that promotes innovation and safeguards consumers is emphasized by Zetzsche et al. (2020). Their findings highlight the fact that regulators' capacity to foster an atmosphere that welcomes technological innovation and disruption while protecting against possible threats like fraud, data breaches, and exploitation is crucial to the success of FinTech adoption. The authors contend that excessively onerous regulations, particularly in emerging areas where the regulatory environment is still changing, might hinder innovation and keep FinTech companies from realizing their full potential. On the other hand, a lack of regulation may result in market abuses that put consumers in danger and erode confidence in digital financial systems. In order to protect users and the integrity of the financial system, regulatory frameworks must create a clear boundary while fostering a degree of flexibility that permits the dynamic evolution of FinTech. In their paper, Zreik and Iqbal (2025) examine the evolving global regulatory frameworks surrounding fintech innovations. They highlight the challenge regulators face in maintaining a balance between fostering technological innovation and ensuring financial stability and consumer protection. The study explores cross-border regulatory differences and emphasizes the need for harmonized policies. It discusses how overly stringent regulations can stifle innovation, while lenient rules may expose markets to systemic risks. Case studies from various jurisdictions illustrate the dynamic tension between market freedom and oversight. The authors advocate for adaptive, principle-based regulations to support sustainable fintech growth globally.
New technologies such as blockchain and cryptocurrency represent the main domains where regulation is crucial. Latiff et al. (2025) explore how research and development (R&D) in fintech is transforming the financial sector. The study highlights key trends such as blockchain, digital banking, and AI-driven financial services, emphasizing their role in enhancing efficiency, accessibility, and customer experience. It also examines how fintech R&D supports financial inclusion and innovation. The authors analyze data from emerging and developed economies to identify disparities and growth opportunities. They stress the importance of continued investment in fintech research to drive sustainable sectoral development. The paper concludes with policy recommendations for fostering a robust fintech ecosystem.
The experiences of various nations and areas provide insightful guidance on how to regulate FinTech. FinTech companies may now test their products in a controlled environment under regulatory oversight in Europe thanks to the establishment of regulatory sandboxes, which spare them from the burden of strict compliance requirements. This has made it possible for new financial products to be released faster on the market while maintaining real-time risk monitoring and mitigation capabilities for regulators. Zetzsche et al. (2020) argue for a new regulatory approach tailored to digital finance platforms. They highlight how traditional regulations struggle to address the rapid evolution of fintech ecosystems. The paper proposes adaptive, technology-neutral policies. It emphasizes global coordination to ensure effective oversight. Comprehensive FinTech regulatory frameworks have been created by nations like Singapore and Malaysia in an effort to align domestic laws with those of nearby nations and promote increased cross-border financial activity. Zreik and Iqbal (2025) examined into how countries manage the dual challenge of regulating fintech growth while ensuring consumer safeguards. The chapter outlines diverse global strategies in response to fintech's disruptive potential. It reflects on regulatory innovation, such as sandboxes and agile frameworks. The authors emphasize the importance of cross-border alignment to prevent regulatory arbitrage. They call for a forward-thinking approach that embraces both innovation and responsibility.
Latiff et al. (2025) investigate how evolving fintech research is reshaping the modern financial landscape. They outline the transformative impact of technologies such as machine learning, decentralized finance (DeFi), and robo-advisors on traditional banking. The study emphasizes the role of academic and industrial R&D in driving sector-wide innovation. It notes a surge in fintech collaborations between startups, universities, and regulators. The authors also explore the socio-economic benefits of fintech, particularly in underbanked regions. By mapping global research trends, they identify emerging priorities in digital finance. Cybersecurity, regulatory adaptability, and AI ethics are highlighted as critical focus areas. The paper advocates for supportive policies that accelerate responsible innovation. Overall, it offers a strategic roadmap for leveraging research to empower financial systems.
The Role of Government and Policy Interventions
The growth and prosperity of FinTech ecosystems are greatly influenced by governments, especially in developing nations where traditional financial infrastructure is frequently lacking. Governments can establish a conducive atmosphere that promotes innovation, financial inclusion, and expedites economic progress by means of policy interventions, regulatory reforms, and strategic collaborations. Government engagement in FinTech has a wide range of effects, influencing everything from tax incentives and regulatory frameworks to digital identity initiatives and cross-sector partnerships. According to Chironga et al. (2018), policy initiatives have been essential in driving the expansion of FinTech in Africa. Governments in several African nations have put policies in place to encourage the growth of FinTech because they see it as a means of closing the divide between the banked and unbanked. Reforms in licensing, for instance, have streamlined the regulatory procedure for FinTech firms, facilitating the entry of new businesses into the market. This has had an especially big effect on mobile money services, as less complicated licensing has made it possible for telecoms firms to provide financial services without having to adhere to the strict rules that are usually placed on banks. Tax benefits have been a major factor in promoting investment in the FinTech industry. Governments have made it more appealing for domestic and foreign investors to promote innovation in the digital finance area by introducing tax exemptions and lowering corporation tax rates for FinTech companies. These regulatory changes have aided in the explosive expansion of mobile money services like M-Pesa in Kenya, which has changed the country's financial landscape by giving millions of unbanked people access to financial services.
To spur innovation in digital banking, governments in emerging nations are increasingly implementing public-private partnerships (PPPs) in addition to tax and regulatory reforms. (Gammeltoft, et.al., 2012) present a contingency framework to understand how emerging multinational enterprises (EMNEs) achieve strategic fit in global operations. They argue that EMNEs face unique challenges compared to developed-market firms due to institutional and resource constraints. The study emphasizes the role of contextual variables—such as home-country institutions and firm-specific capabilities—in shaping strategic choices. It explores how these firms adapt governance, entry modes, and organizational structures to align with host environments. The paper proposes that strategic fit for EMNEs is dynamic and dependent on both internal competencies and external pressures. The authors also call for more research on cross-border learning and capability upgrading. Their framework integrates institutional theory with strategic management perspectives. This approach provides a nuanced understanding of EMNE behavior. The paper sets a forward-looking research agenda in global strategy for emerging firms.
The creation of regulatory sandboxes, which let FinTech companies test their goods and services in a monitored setting, is another example of how public-private collaborations are put to use. These "sandboxes" give startups a secure environment in which to test new ideas without being constrained by all the regulations that could otherwise hamper their expansion. Regulatory sandboxes are a tool that governments in emerging markets have embraced for striking a balance between risk management and innovation. According to (Gammeltoft, et.al., 2012), governments in Asia have been leading the way in the implementation of sandboxes, which enable the testing of novel technologies including peer-to-peer lending platforms, blockchain, and artificial intelligence. Regulatory sandboxes facilitate the development of the digital finance ecosystem by offering FinTech companies a structured and encouraging environment for innovation, while also assisting them in managing the complexity of compliance.
Digital identification initiatives are another important area where governments have had a big influence on the uptake of FinTech. Government-led digital identification initiatives, according to Senyo et al. (2024) explore the dynamics of government-led digital transformation within FinTech ecosystems. The study examines how state initiatives shape the growth, innovation, and structure of digital financial services. It highlights the roles governments play as regulators, facilitators, and sometimes even participants in FinTech ecosystems. By analyzing case studies and empirical data, the authors show how policy decisions, public infrastructure investment, and digital governance impact FinTech evolution. They emphasize the importance of aligning governmental digital strategies with industry needs and user trust. The research reveals that coherent, inclusive, and innovation-friendly policies enable a thriving digital financial environment. Additionally, the paper identifies tensions between regulatory control and technological agility. It discusses how governments can balance innovation with risk mitigation. The study also touches on the significance of public-private partnerships. The authors propose a framework for evaluating digital transformation outcomes. Their findings contribute to both FinTech research and digital governance literature. The paper provides actionable insights for policymakers aiming to foster resilient and inclusive digital financial systems.
Digital identification initiatives benefit KYC procedures directly, but they also advance the more general objectives of financial inclusion and economic empowerment. Governments provide citizens access to a range of financial products and services that were previously unattainable by giving them a valid digital identity. This covers credit, insurance, and investment products in addition to standard banking services, all of which can help people and small businesses become better financial citizens. Programs for digital identities can also be very helpful in enabling people to access government services, such subsidies and social welfare payments, which are increasingly being provided via digital channels. Governments in emerging nations are setting the foundation for more accessible and equitable financial systems that could support sustained economic growth by investing in digital identification infrastructure.
There are risks and difficulties involved with more government involvement in FinTech, even while the advantages are obvious. Chironga et al. (2018), for instance, issue a warning that excessive regulation or badly crafted laws may hinder innovation and restrict the expansion prospects of FinTech businesses. Governments may occasionally feel pressured to enact stringent laws in an effort to regulate cutting-edge technologies. This might deter investment and impede the growth of the FinTech industry. Furthermore, there's a chance that government-driven projects like digital identification schemes will spark worries about data security and privacy, especially in nations with lax data protection regulations. The success of these initiatives will depend on how well they are implemented, protecting people's private information while advancing financial inclusion Table 1.
| Table 1 Challenges and Opportunities in the Adoption of Fintech in Emerging Markets | |
| Challenges | Opportunities |
| Regulations in emerging nations are frequently disjointed and ambiguous, which causes legal ambiguity and higher compliance expenses that impede FinTech innovation (Akanfe, 2022; Zreik & Iqbal, 2025). Adoption is delayed in several nations due to a lack of regulations addressing digital financial products (Zetzsche et al., 2020). | Flexible rules and adaptive regulatory sandboxes promote confidence and speed up the adoption of FinTech by striking a compromise between innovation and consumer protection (Akanfe, 2022; Zreik & Iqbal, 2025). In order to promote growth and maintain financial stability, governments can create well-balanced frameworks (Zetzsche et al., 2020). |
| Users' confidence in digital payment systems is weakened by data breaches and a lackluster cybersecurity architecture (Akanfe, 2022; Gomber et al., 2021). Users are reluctant to embrace FinTech services due to lax data privacy regulations (Colombage et al., 2025). | Consumer confidence can be greatly increased by enforcing strict data privacy regulations and strengthening cybersecurity processes (Akanfe, 2022). Blockchain and other emerging technologies provide safe ways to conduct transactions, improving security (Gomber et al., 2021; Colombage et al., 2025). |
| FinTech's reach is limited in rural and low-income communities by low internet penetration and restricted smartphone access (Chironga et al., 2018; Mhlanga, 2022). Service delivery is hampered by network instability and a lack of digital infrastructure (Senyo et al., 2024). | Mobile-first FinTech solutions, which successfully broaden financial inclusion, are made possible by the sharp rise in mobile phone usage (Chironga et al., 2018). In areas with poor connectivity, access is made possible by offline solutions and USSD-based banking (Mhlanga, 2022; Senyo et al., 2024). |
| FinTech adoption is hindered by low digital literacy and a cultural predilection for cash (Akanfe, 2022). Because of deeply rooted financial practices, there is ongoing resistance to change and mistrust of digital platforms (Le, 2021). | Programs for digital literacy that are culturally sensitive promote adoption and use of digital money. Consumer loyalty and trust are increased by educational programs (Akanfe, 2022; Pandey, 2025). |
| Formal financial services are inaccessible to large informal sectors, and customer onboarding is made more difficult by the lack of official identification (Khaing, 2024; Ozili, 2020). FinTech's spread is limited by issues with the informal sector (Jia & Kanagaretnam, 2025). | The inclusion of unbanked groups is improved by innovations such as digital IDs and alternative credit scoring. Mobile money and peer-to-peer lending encourage the informal sectors to integrate (Khaing, 2024; Ozili, 2020; Jia & Kanagaretnam, 2025). |
| FinTech development is hindered by sluggish integration and legacy financial systems (Gammeltoft et al., 2012). Innovation dissemination is hampered by traditional banks and startups not working together (Cai et al., 2022). | Service innovation is fueled by collaborative models that combine startup agility with incumbent stability. New digital finance paradigms are being pushed by ongoing information systems research (Gammeltoft et al., 2012; Cai et al., 2022; Sahid & Maleh, 2024). |
| FinTech's expansion in emerging economies is constrained by financial constraints and economic unpredictability. Green FinTech development may be neglected in favor of environmental goals (Pang et al., 2024). | Sustainable financial solutions that support environmental objectives can be made possible by fintech. Utilizing innovation helps achieve the Sustainable Development Goals and promotes green growth (Pang et al., 2024; Colombage et al., 2025). |
| Ecosystem growth is delayed by a lack of coordination in policy and a lack of knowledge among regulators (Senyo et al., 2024). Effective regulation of rapidly changing FinTech developments is a challenge for policymakers (Arner et al., 2016). | Digital transformation is fueled by public-private partnerships and strong government leadership. Policies that are clear and forward-looking promote financial access and draw in investment (Senyo et al., 2024; Arner et al., 2016; Latiff et al., 2025). |
Challenges in Emerging Markets
Several studies have highlighted FinTech's revolutionary potential to foster financial inclusion, particularly in markets that have historically been underserved by the official banking system. The historical evolution and revolutionary effects of FinTech as a reaction to the global financial crisis are traced by (Arner et al., 2016). The study makes the case that FinTech signifies a fundamental change in the composition and provision of financial services, going beyond simple technological advancement. The authors divide the progress of FinTech into three stages: the creation of new financial services, the digitization of finance, and the growth of a new financial ecosystem powered by platforms and data. They highlight how the 2008 financial crisis revealed traditional finance's inefficiencies and problems with trust, creating regulatory opportunities for tech-driven newcomers. The report claims that fintech has changed the function of middlemen, with non-banking organizations now fulfilling important responsibilities. The essay also evaluates how regulations have changed—or not changed—in response to these advancements. Crucially, it provides information about the fragmentation of global regulations and the necessity of coordinated international efforts. In the end, the authors believe that FinTech will contribute to a more dynamic, resilient, and inclusive financial environment.
(Zetzsche et al., 2020) examine how the financial services sector is changing and how conventional regulatory approaches are being challenged by the quick ascent of digital finance platforms. The study focuses on how platforms that decentralize and disintermediate services, such as digital wallets, robo-advisors, and peer-to-peer lending, challenge the functions of traditional banks. The authors contend that the systemic risks, data governance concerns, and market power concentration brought about by these new actors cannot be adequately managed by the financial laws that are already in place, which are mostly based on legacy institutions. They suggest a change to a platform-based regulatory structure that takes into account the fact that digital money is cross-border and algorithm-driven. The report also highlights the need for international cooperation to provide equitable, efficient oversight and issues a warning against regulatory arbitrage. Their argument emphasizes the necessity of technology-driven supervisory methods and real-time regulatory tools. Essentially, our study promotes a flexible and forward-thinking regulatory framework to guarantee that, in the age of digital finance, innovation and consumer protection coexist. (Chironga et al., 2018) examine the swift expansion and influence of mobile financial services (MFS) throughout Africa, highlighting their contribution to the continent's financial inclusion. Particularly for marginalized groups lacking conventional bank accounts, the paper emphasizes how mobile money platforms have revolutionized access to banking services. It highlights important success elements that have aided MFS providers in gaining the trust and loyalty of their clients, including agent networks, user-centric design, and collaborations with telecom operators. The writers talk about issues like infrastructural constraints, regulatory complexity, and competition from new fintech firms. They emphasize that in order to sustain growth, providers must constantly innovate and deliver value-added services above and beyond simple transactions. The study also looks at the socioeconomic advantages of MFS, such as enhanced livelihoods and financial empowerment. All things considered, the paper portrays mobile financial services as an effective instrument for transforming Africa's financial environment and promoting equitable economic growth.
(Latiff et al., 2025) examine how fintech research is promoting innovation and change in the financial industry, hence influencing its future. Their research focuses on new developments that are making financial services faster, safer, and more customer-focused, like blockchain technology, artificial intelligence, and big data analytics. The authors stress the importance of continuous research and development in tackling issues like financial inclusion, cybersecurity, and regulatory compliance. They contend that developments in fintech enable financial institutions to increase access to underrepresented markets, cut expenses, and boost efficiency. The study also explores how cooperation among regulators, industry, and academics may hasten the adoption of fintech and responsible innovation. The study also emphasizes how crucial adaptive policies are for striking a balance between risk management and innovation. All things considered, the study offers a thorough summary of how fintech research trends are essential to changing the global financial ecosystem. Jia and Kanagaretnam (2025) examine the relationship between financial inclusion and digital inclusion using peer-to-peer (P2P) lending platforms as a lens. According to their research, by giving marginalized groups access to more alternative funding sources, greater access to digital technology greatly improves financial inclusion. The authors show how P2P lending makes it possible for more people to participate in financial markets by lowering conventional obstacles like location and credit history. Additionally, they draw attention to ethical issues by highlighting responsible lending methods, transparency, and equity in digital banking. According to the study, digital literacy is essential for enabling users to take full use of P2P services. The study also addresses regulatory issues and the necessity of well-balanced laws to safeguard consumers and promote innovation. The study comes to the conclusion that, with the right management, digital platforms can close financial access gaps and encourage economic empowerment in a variety of areas.
Pang et al. (2024) investigate how enhancing governance frameworks, developing fintech innovation, and efficiently managing natural resources might help G-20 nations achieve sustainable green growth. The study highlights that in order to promote ecologically friendly development without diminishing natural resources, careful use of mineral resources is crucial. One of the main forces behind the promotion of environmentally friendly financial solutions and the mobilization of green investments is fintech innovation. The authors contend that effective governance is essential to guaranteeing accountability, transparency, and the application of environmental laws. Their approach emphasizes how effective policy and technology advancement can work in concert to balance ecological protection and economic prosperity. The study also discusses issues including market preparedness for green technology adoption and regulatory barriers. The study comes to the conclusion that the G-20's shift to sustainable economies can be accelerated by a concerted strategy that combines resource management, fintech, and governance. For legislators looking to balance economic and environmental objectives, this path offers insightful information. In his analysis of the changing link between FinTech advances and SMEs, Pandey (2025) emphasizes how digital financial technologies are changing the funding, operations, and expansion prospects of SMEs. The survey emphasizes how important FinTech is to SMEs' access to funding, which is frequently underserved by traditional banks. It also looks at how data analytics, digital lending platforms, and simplified payment systems are some of the ways that FinTech products improve productivity. Pandey lists the difficulties that SMEs are currently facing, including cybersecurity threats, legislative ambiguities, and obstacles to technology adoption. The report makes recommendations for the future, highlighting the necessity of encouraging laws, raising SMEs' level of digital literacy, and fostering cooperation between financial institutions and FinTech companies. It also talks about how new technologies like blockchain and artificial intelligence could help SMEs become even more powerful. All things considered, the study offers a thorough summary of how FinTech is revolutionizing SMEs and offers strategies for maximizing these advantages in a sustainable manner.
(Gomber, et.al., 2021) offer a thorough analysis of the quickly developing fields of FinTech and digital banking, highlighting significant advancements and current research patterns. They examine how FinTech innovations—like peer-to-peer lending, robo-advisors, and blockchain—are upending established financial services by making them more customer-focused, accessible, and efficient. The study also emphasizes the dangers associated with cybersecurity, data privacy, and regulatory compliance that come with the digital revolution of the financial industry. The authors also point out gaps in the literature, highlighting the need for more multidisciplinary study that integrates viewpoints from the fields of finance, technology, and regulation. They urge more investigation on how FinTech affects market competition, inclusivity, and financial stability. The study also emphasizes how crucial it is to comprehend consumer behavior while implementing digital banking. All things considered, this work lays the groundwork for directing future scholarly research and real-world developments in FinTech and digital financial networks.
Gammeltoft et.al.(2012) explored the emergence of emerging multinational corporations (EMNCs) and offer a contingency framework to comprehend how these businesses attain strategic fit in international marketplaces. The authors stress that because of their distinct institutional settings, quick internationalization processes, and resource limitations, EMNCs are not like classic multinational corporations. Their methodology takes into account both external environmental influences and internal capabilities, emphasizing how these interact to affect performance and strategic decisions. According to the report, in order to obtain a competitive edge, EMNCs should modify their global strategy in accordance with particular market circumstances and firm-specific elements. The report also highlights important research gaps, urging academics to investigate the dynamic mechanisms by which EMNCs modify and advance their tactics. More long-term research is needed to fully understand the complexities of expanding businesses internationally. All things considered, the paper advances knowledge of the strategic opportunities and difficulties faced by EMNCs in a quickly globalizing market. The potential of Central Bank Digital Currencies (CBDCs) as a vital instrument for closing the gap between the official and informal economies in underdeveloped nations is examined by Khaing (2024). According to the report, a large number of participants in the informal sector do not have access to regular banking, which restricts their ability to participate in financial inclusion and economic progress. By bringing unofficial operations into the official financial system, CBDCs provide a safe, easily accessible digital payment option that enhances regulatory control and transparency. The possible advantages of CBDCs are covered in the article, including decreased transaction costs, improved monetary policy efficacy, and less dependence on currency. In emerging countries, it also tackles issues including cybersecurity threats, user adoption, and technology infrastructure. CBDCs have the potential to foster more inclusive development and economic stability by including informal actors into digital finance. The report makes policy recommendations to guarantee that the adoption of CBDC promotes usability and trust while meeting the needs of vulnerable people. All things considered, the study highlights CBDCs as a game-changing invention to close financial gaps in developing nations.
Le (2021), taking into account the pandemic as a driving force for changing financial practices, examines the elements impacting customers' intention and loyalty to embrace FinTech services following the COVID-19 shutdown. The study identifies important factors that have a major impact on sustained FinTech use in the post-pandemic setting, including perceived ease of use, trust, and service quality. It draws attention to how the forced digital transition during the shutdown hastened the adoption and dependence on FinTech services for routine financial tasks. The study also looks at how user happiness and satisfying experiences can foster loyalty, which makes FinTech a better choice even after the crisis. The study also explores how convenience and security issues influence client retention. Le highlights that in order to continue growing in this new normal, FinTech companies need to concentrate on upholding good service standards and cultivating trust. The study provides suggestions for FinTech providers looking to improve user engagement and sheds light on how external shocks affect consumer behavior. In the end, it illuminates the changing financial landscape influenced by digital usage spurred by pandemics. Senyo et al. (2024) investigate how important governments are to FinTech ecosystems' digital development. The study focuses on how investments, rules, and public policies influence the creation and uptake of cutting-edge financial innovations. It emphasizes how crucial government action is in fostering an atmosphere that encourages cooperation between FinTech companies, conventional financial institutions, and regulatory agencies. The authors examine several approaches used by governments to promote cybersecurity, digital inclusivity, and confidence in FinTech services. The study also addresses issues like regulatory ambiguity and the requirement for flexible frameworks to keep up with the quick advancements in technology. The study emphasizes that institutional changes and stakeholder involvement are just as important for a successful digital transformation as technology adoption. This report offers important insights into how public sector leadership might promote sustainable growth in FinTech ecosystems worldwide by concentrating on government-led initiatives. It comes to the conclusion that, in the rapidly changing world of digital banking, balancing innovation, consumer protection, and financial stability requires strategic government participation.
In the framework of the Fourth Industrial Revolution, Mhlanga (2022) examines the advantages and disadvantages of FinTech technologies and digital financial inclusion. The study emphasizes how underprivileged groups, especially in developing nations, might have greater access to financial services thanks to cutting-edge technology like artificial intelligence (AI), blockchain, and mobile platforms. It emphasizes how accessible, easy, and inclusive financial solutions provided by FinTech have the potential to alleviate poverty. But the author also discusses important issues like cybersecurity threats, infrastructural constraints, legislative complexity, and gaps in digital literacy. In order to develop strong frameworks and supportive laws, Mhlanga highlights the necessity of concerted efforts by governments, financial institutions, and technological companies. According to the report, creative approaches are needed to close the digital divide and shield weaker users from abuse. In order to promote sustainable financial inclusion in the digital age, the study concludes that maximizing FinTech's potential necessitates striking a balance between social and economic factors and technological advancement. In light of the COVID-19 pandemic, Ozili (2020) investigates the vital role that FinTech plays in advancing financial inclusion. The report talks about how, when traditional banking channels were interrupted, digital financial services helped marginalized populations fill access gaps. Ozili draws attention to important issues that impacted the adoption and efficacy of FinTech solutions during the crisis, including digital disparities, cybersecurity worries, and regulatory barriers. In order to promote equitable FinTech growth, the report recommends governmental actions to strengthen digital infrastructure, raise financial literacy, and put supporting legislation into place. In order to guarantee fair access, it also emphasizes how crucial cooperation is between governments, financial institutions, and technological companies. Ozili also looks at how FinTech advancements can strengthen financial institutions' ability to withstand future crises. Overall, the study highlights that, particularly during periods of global upheaval like the COVID-19 epidemic, carefully thought-out policies are crucial to maximizing FinTech's potential for financial inclusion.
A thorough analysis of the changing dynamic between fintech businesses and conventional financial institutions may be found in Tello-Gamarra et al. (2022). While existing institutions work to adapt and cooperate, fintechs are transforming financial services through innovation, agility, and customer-centric methods, according to their thorough literature study. The report identifies important topics that affect the dynamics between fintech and institutions, including collaboration structures, regulatory obstacles, and technological uptake. It also examines the conflicts that arise between collaboration and disruption, highlighting how crucial strategic alignment is to both parties' interests. The authors suggest a study agenda for the future that centers on topics including ecosystem growth, digital trust, and the effects of developing technologies. In order to comprehend the integration processes and long-term impacts on financial markets, they emphasize the necessity for additional empirical research. Overall, this work contributes to clarifying how fintechs and institutions coexist and evolve in a rapidly changing financial landscape. (Cai, et.al., 2022) examine the expanding nexus between information systems (IS) and fintech research, emphasizing new developments that influence both domains. Their research highlights how modern IS frameworks are becoming more and more necessary for the successful deployment and scalability of financial breakthroughs like blockchain, artificial intelligence, and digital payments. They examine the ways in which IS theories and methodology advance our knowledge of user experience, security, and fintech acceptance. The authors point out important research gaps, including as the requirement for more in-depth knowledge of the dynamics of the fintech ecosystem and its effects on regulations. They also go over the real-world ramifications for legislators and fintech developers who want to promote innovation while maintaining system trust and dependability. This study emphasizes the value of interdisciplinary approaches in tackling the intricate technological and societal issues facing fintech. All things considered, the paper lays out potential paths for fintech research integrated into the IS field, encouraging cooperative advancement.
Colombage et al. (2025) investigate how innovation and financial technology (FinTech) might promote sustainable development. The chapter emphasizes how FinTech may promote inclusive economic growth in line with the Sustainable Development Goals (SDGs), increase access to financing, and increase transparency. It talks on important breakthroughs that help achieve social and environmental goals, like blockchain, digital payments, and green finance tools. The authors examine issues that could impede FinTech's contribution to sustainability, such as digital inequalities and regulatory obstacles. The study highlights the need of cooperation between public and private sectors as well as international organizations and suggests ways to use FinTech to promote fair development and long-term resilience. All things considered, the chapter portrays FinTech as a vital facilitator for funding and accomplishing SDGs in the dynamic global economy. Akanfe (2022) examines the key elements that affect digital financial inclusion, with particular attention to data protection, compliance with regulations, and cultural variations in the uptake of digital payment systems throughout nations. The dissertation emphasizes how user acceptance and confidence in these technologies are shaped by legal compliance and faith in data protection. Additionally, it looks at how cultural values affect how digital financial services are perceived and used, indicating that one-size-fits-all strategies might not work everywhere. The report finds effective practices for striking a balance between innovation and consumer protection by examining various regulatory contexts. It also emphasizes how crucial customized approaches that take into account cultural quirks are to increasing adoption rates. The study advances our knowledge of how to increase digital payments in a way that is inclusive while maintaining privacy and regulatory integrity.
A thorough review of the most recent advancements in fintech and digital currency is given by Sahid and Maleh (2024), who highlight how these technologies are changing financial services all over the world. The emergence of digital currencies, blockchain applications, and the incorporation of artificial intelligence into financial transactions are among the contemporary topics they examine. The writers talk about how fintech can revolutionize lending and payment security, efficiency, and accessibility. They also examine issues that could impede adoption, such as cybersecurity threats, legislative barriers, and the digital divide. Prospects for the future center on sustainable innovation, greater cooperation between fintech startups and traditional financial institutions, and changing regulatory frameworks to strike a balance between innovation and consumer protection. The chapter emphasizes how digital currency is becoming an increasingly significant factor in promoting economic growth and financial inclusion, particularly in emerging nations. Zreik and Iqbal (2025) explore the intricate worldwide regulatory landscape of fintech, emphasizing the fine line that separates protecting consumers from promoting innovation. Their research looks at how many nations are drafting laws to handle issues like fraud, data privacy violations, and unstable financial markets while allowing for quick technological advancements. The authors stress the necessity of flexible, progressive regulatory frameworks that can keep up with the rapid advancement of fintech goods and services. They also talk about how harmonizing standards and avoiding regulatory arbitrage require international cooperation. The chapter provides insights into how regulators might encourage fintech growth without sacrificing market integrity by examining case studies and regulatory trends. For stakeholders who want to comprehend the potential and difficulties that fintech regulation offers globally, this research is essential. In the end, it urges a cooperative strategy that strikes a balance between effective monitoring and incentives for innovation in order to create a robust and inclusive global financial ecosystem.
Problem Statement
FinTech adoption in emerging nations is hampered by a mix of legislative, technological, and socioeconomic barriers. Despite considerable technological developments and increased availability of financial goods, these economies suffer from limited financial access, inadequate regulatory frameworks, and low consumer trust in digital platforms. The goal of this research is to look at the specific problems and potential for FinTech adoption in emerging nations and make recommendations on how to solve these challenges in order to maximize the benefits of FinTech.
This study takes various statistical approaches, integrating quantitative and qualitative research methodologies to provide a thorough analysis of FinTech uptake in emerging markets. A structured questionnaire was distributed to 253 respondents, with a specific focus on persons with varied degrees of financial and digital literacy in an emerging economy. The study used convenience sampling, concentrating on areas where FinTech adoption is most prevalent Tables 2-8.
| Table 2 Sampling and Data Collection and Research Design | |
| Category | Description |
| Sample Size | 253 respondents taken as sample size |
| Sampling Technique | Convenience sampling method adopted |
| Data Collection | Primary data was acquired via online and offline surveys. The questionnaire contained 22 items that assessed regulatory barriers, technical literacy, financial inclusion, and consumer trust. |
| Data Segmentation | Respondents were categorized according to variables such as age, gender, economic level, education, and technological literacy. |
| Research Design | |
| Descriptive | Analyzes respondents' demographic profiles, awareness of FinTech solutions, and attitudes about FinTech obstacles and prospects. |
| Analytical | Factor analysis is used to uncover the underlying elements that influence FinTech adoption. Cronbach's Alpha is used to ensure the trustworthiness of the structures. |
| Table 3 Demographic Profile of Respondents | ||
| Demographic Variable | Frequency | Percentage (%) |
| Gender | ||
| Male | 140 | 55.3 |
| Female | 113 | 44.7 |
| Age Group | ||
| 20 -29 years | 65 | 25.7 |
| 30 - 39 years | 98 | 38.7 |
| 40 - 49 years | 54 | 21.3 |
| Above 50 years | 36 | 14.3 |
| Educational Qualification | ||
| Undergraduate (Commerce / Humanities) and Diploma / Others | 50 | 19.8 |
| Undergraduate (Engg / Science) | 120 | 47.4 |
| Postgraduate | 83 | 32.8 |
| Income Level (P.A.) (in INR) | ||
| Below 1 Mio | 72 | 28.5 |
| 1 Mio – 2 Mio | 102 | 40.3 |
| Above 2 Mio | 79 | 31.2 |
| Table 4 Descriptive Statistics | ||
| Variable | Mean | Standard Deviation |
| Awareness of FinTech | 3.84 | 0.97 |
| Trust in Digital Payments | 3.45 | 1.12 |
| Regulatory Challenges | 4.11 | 0.89 |
| Technological Literacy | 3.22 | 1.01 |
| Table 5 Reliability Analysis | ||
| Construct | Cronbach’s Alpha | No. of Items |
| Regulatory Challenges | 0.825 | 6 |
| Technological Literacy | 0.812 | 5 |
| Consumer Trust | 0.838 | 7 |
| Financial Inclusion | 0.790 | 4 |
| Overall | 0.835 | 22 |
| Table 6 Factor Analysis | ||
| Component | Variance Explained (%) | Cumulative Variance (%) |
| Regulatory Barriers | 28.23 | 28.23 |
| Technological Literacy | 19.14 | 47.37 |
| Consumer Trust | 15.22 | 62.59 |
| Financial Inclusion | 9.76 | 72.35 |
| Table 7 Factor Analysis: Total Variance Explained | |||
| Component | Initial Eigenvalues | Extraction Sums of Squared Loadings | Rotation Sums of Squared Loadings |
| Total | % of Variance | Cumulative % | |
| 1 | 4.993 | 31.203 | 31.203 |
| 2 | 2.626 | 16.414 | 47.617 |
| 3 | 2.176 | 13.600 | 61.218 |
| 4 | 1.669 | 10.433 | 71.650 |
| 5 | 0.748 | 4.676 | 76.326 |
| Table 8 Factor Loadings for Fintech Adoption in Emerging Markets | ||||
| Item | Factor I | Factor II | Factor III | Factor IV |
| Government regulations and policies hinder FinTech adoption in my country. | 0.892 | |||
| Lack of digital literacy is a major challenge for FinTech growth in emerging markets. | 0.874 | |||
| Limited internet access is a barrier to widespread FinTech adoption. | 0.865 | |||
| FinTech platforms offer more accessibility compared to traditional banking services. | 0.831 | |||
| FinTech companies are improving financial inclusion for the unbanked population. | 0.856 | |||
| Consumers trust in FinTech platforms is essential for their widespread adoption. | 0.842 | |||
| I am satisfied with the security measures on FinTech platforms. | 0.833 | |||
| The user interface and experience of FinTech apps are easy and intuitive. | 0.812 | |||
| FinTech provides opportunities for economic development in my country. | 0.844 | |||
| FinTech helps small and medium enterprises (SMEs) access financial services easily. | 0.832 | |||
| Financial products offered by FinTech companies are more flexible than those provided by traditional banks. | 0.811 | |||
| FinTech innovations will contribute to the future growth of the economy. | 0.841 | |||
| Mobile money services are helping people in rural areas access financial services. | 0.832 | |||
| Digital lending platforms are easier to access compared to traditional credit institutions. | 0.809 | |||
Objectives of the Study
1. To identify the key challenges in the adoption of FinTech in emerging markets.
2. To explore the opportunities for FinTech to enhance financial inclusion and economic growth in these markets.
3. To evaluate the impact of regulatory frameworks on the adoption of FinTech services.
4. To analyze the role of technological literacy in influencing consumer trust and adoption of FinTech solutions.
Hypothesis of the Study
H1: Regulatory challenges have a significant negative impact on FinTech adoption in emerging markets.
H2: Technological literacy positively influences consumer trust and the adoption of FinTech services.
H3: Financial inclusion opportunities significantly influence FinTech adoption in emerging markets.
H4: There is a significant relationship between economic development and the growth of FinTech adoption.
The descriptive analysis shed light on the demographic characteristics of the respondents. The bulk of respondents (58%) were between 25 and 40 years old. Approximately 62% of the sample had access to basic financial services, with 45% being aware of FinTech options such as mobile banking and digital payments.
Cronbach's Alpha was used to determine the internal consistency of survey constructs. The results showed that all structures were highly reliable.
A factor analysis was undertaken to determine the underlying determinants impacting FinTech uptake in emerging markets. The Kaiser-Meyer-Olkin (KMO) measure of sample adequacy was 0.821, and Bartlett's test of sphericity showed significant results (p < 0.001). The factor analysis identified four key components: regulatory hurdles, technology literacy, consumer trust, and financial inclusion, accounting for 72.35% of the total variation.
This factor analysis table shows the eigenvalues, variance explained, and cumulative percentages for each component. The extraction and rotation sums provide information on how the variance is spread throughout the components following rotation.
Four essential elements impacting acceptance are indicated by the factor loadings for FinTech uptake in emerging markets. The main (Factor I primarily relates to barriers) obstacles to adoption that fall under this category are internet connectivity, digital literacy, and government laws. Factor II places a strong emphasis on usability and trust, highlighting the security, UI, and customer trust in FinTech platforms. Factor III emphasizes the financial opportunities that FinTech presents, especially in terms of helping SMEs and encouraging financial flexibility. The focus of Factor IV is on innovation and accessibility, with a particular emphasis on digital lending and mobile money as instruments for financial inclusion, especially in rural areas.
Findings of the Study
• Regulatory frameworks in emerging nations continue to be a key barrier to the mainstream adoption of FinTech. Inconsistent regulations and a lack of transparency limit the growth of FinTech services. "Hypothesis H1 is supported as regulatory challenges were found to have a significant negative impact on FinTech adoption".
• Consumers' technology literacy influences their propensity to accept FinTech solutions. Higher levels of digital literacy are associated with greater trust and uptake of FinTech services. "Hypothesis H2 is supported, as technological literacy was found to positively influence consumer trust and adoption".
• FinTech has a significant opportunity for increasing financial inclusion in emerging nations by making financial services more accessible and inexpensive to previously disadvantaged people. "Hypothesis H3 is supported as financial inclusion opportunities significantly influence FinTech adoption".
• FinTech innovations help to drive economic growth, notably by creating opportunities for small and medium-sized businesses (SMEs) and facilitating economic development in neglected areas. "Hypothesis H4 is supported, as there is a significant relationship between economic development and FinTech adoption".
Emerging markets have enormous potential for FinTech adoption due to their massive unbanked populations and increasing mobile technology usage. However, in order to realize this potential, legislative impediments, a lack of technical literacy, and concerns with consumer trust must be overcome. This study provides governments, financial institutions, and FinTech companies with concrete insights for overcoming these difficulties and capitalizing on FinTech's prospects in emerging nations. The study's findings provide significant information for stakeholders in the FinTech sector. FinTech regulation provides a challenging problem for researchers, particularly in emerging nations, where the potential advantages of financial innovation must be carefully balanced against the hazards. All contributors emphasized the importance of taking a balanced strategy that encourages innovation while also protecting consumers and guaranteeing financial stability. As FinTech evolves, regulators must stay nimble, modifying their policies to keep up with technical improvements while ensuring that the advantages of FinTech are widely distributed and dangers are adequately controlled. Researchers must endeavor to create a helpful regulatory framework, while FinTech companies should prioritize consumer education and trust-building initiatives. Furthermore, investments in digital infrastructure and technology literacy programs are critical to accelerating FinTech adoption in emerging nations.
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Received: 28-May-2025, Manuscript No. AMSJ-25-15967; Editor assigned: 29-May-2025, PreQC No. AMSJ-25-15967(PQ); Reviewed: 11-Jun-2025, QC No. AMSJ-25-15967; Revised: 20-Jun-2025, Manuscript No. AMSJ-25-15967(R); Published: 28-Jun-2025