Identifying enablers and barriers of fintech adoption: An integrated ism and micmac analysis

Abstract

Fintech in India holds significant potential to transform financial services and enhance financial inclusion. However, adopting fintech technologies faces several challenges, as many industry stakeholders lack a clear understanding of how to leverage these innovations effectively. The purpose of this study is to identify the key enablers that promote the adoption of financial technologies (fintech) in India and to explore the barriers that may hinder their widespread use. The study aims to develop a structural relationship model that highlights the connections between these enablers and barriers, providing a comprehensive understanding of the factors influencing fintech adoption. Additionally, the study seeks to categorize and analyse these factors based on their dependence and driving power, offering insights into how each element impacts the overall fintech ecosystem in India. In total, 11 Enablers and 19 Barriers variables were mined via systematic literature review along with expert opinions. A group interview with more than 12 experts, each having over 10 years of experience in the financial and technological sectors, was conducted. Usually odd in number, they were presented with pairs of variables to gather their opinions. Using “Interpretative Structural Modelling” (ISM) and “Cross-Impact Multiplication Applied to Classification” (MICMAC) analysis, a model unfolding the structural relationship among these factors was formulated to understand the conceptual framework. The study identified digital literacy and regulatory support as connection or mediating variables. Financial inclusion, technological innovation, and ease of use were found to be the driving or independent variables. Risk perception, trust, and infrastructure availability emerged as the dependent variables. Additionally, the subsequent hierarchy and contextual linkages among variables shed light on the key dimensions for decision-making. Financial inclusion, trust, and infrastructure availability were found to be interconnected and significantly influenced by lower-level enablers and barriers, such as risk perception and digital literacy. Regulatory support was identified as a crucial factor to ensure fintech adoption in India.