IDEAS home Printed from https://ideas.repec.org/a/gam/jrisks/v12y2024i11p178-d1518459.html
   My bibliography  Save this article

Defeating the Dark Sides of FinTech: A Regression-Based Analysis of Digitalization’s Role in Fostering Consumers’ Financial Inclusion in Central and Eastern Europe

Author

Listed:
  • Mirela Clementina Panait

    (Faculty of Economic Sciences, Petroleum-Gas University of Ploiești, 100680 Ploiesti, Romania
    Romanian Academy, Institute of National Economy, 010071 Bucharest, Romania)

  • Simona Andreea Apostu

    (Romanian Academy, Institute of National Economy, 010071 Bucharest, Romania
    Department of Statistics and Econometrics, Bucharest University of Economic Studies, 010552 Bucharest, Romania)

  • Iza Gigauri

    (Department of Business Administration, School of Business and Administrative Studies, The University of Georgia, Tbilisi 0171, Georgia)

  • Maria Giovanna Confetto

    (Department of Political and Communication Sciences, University of Salerno, 84081 Salerno, Italy)

  • Maria Palazzo

    (Faculty Law and Economics, Universitas Mercatorum, 00186 Rome, Italy)

Abstract

Financial technologies metamorphose economies with customer-focused innovation. In this way, financial inclusion is fostered and economic growth is increased. However, risks, trust issues, and ethical concerns stem from the faster advancement of digital technologies and expanding financial innovation. Thus, this paper aims to understand the risks and barriers associated with FinTech and consumer adoption, focussing on the impact of digitalization on financial products/services’ acceptance. The research investigates the impact of digitalization on financial services and the recognition of the role played in the global economy by FinTech. For this reason, the regression analysis was used to explore the influence and correlation of various variables on FinTech in Central and Eastern European (CEE) countries, such as Internet usage, online shopping, paying bills via the Internet, and making and receiving digital payments. The results show differences between three clusters of CEEs in terms of FinTech adoption. While several past studies have explored the advantages of FinTech, few studies have investigated the risks associated with its adoption, trust, and barriers to its usage in different country contexts. The present paper fills the gap by analysing the data on Internet usage, online shopping, paying bills via Internet, and sending or receiving digital payments in CEE countries. The study recommends that FinTech companies share information online not only to present their offerings to users, but also to promote financial education through clear and straightforward communication about the features of their services. This approach can indirectly benefit society by contributing to financial development, inclusion, social stability, and, consequently, sustainable development.

Suggested Citation

  • Mirela Clementina Panait & Simona Andreea Apostu & Iza Gigauri & Maria Giovanna Confetto & Maria Palazzo, 2024. "Defeating the Dark Sides of FinTech: A Regression-Based Analysis of Digitalization’s Role in Fostering Consumers’ Financial Inclusion in Central and Eastern Europe," Risks, MDPI, vol. 12(11), pages 1-18, November.
    • Handle: RePEc:gam:jrisks:v:12:y:2024:i:11:p:178-:d:1518459
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-9091/12/11/178/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-9091/12/11/178/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alfonso Siano & Lukman Raimi & Maria Palazzo & Mirela Clementina Panait, 2020. "Mobile Banking: An Innovative Solution for Increasing Financial Inclusion in Sub-Saharan African Countries: Evidence from Nigeria," Sustainability, MDPI, vol. 12(23), pages 1-24, December.
    2. Ms. Ratna Sahay & Mr. Ulric Eriksson von Allmen & Ms. Amina Lahreche & Purva Khera & Ms. Sumiko Ogawa & Majid Bazarbash & Ms. Kimberly Beaton, 2020. "The Promise of Fintech: Financial Inclusion in the Post COVID-19 Era," IMF Departmental Papers / Policy Papers 2020/009, International Monetary Fund.
    3. Khakan Najaf & Md Imtiaz Mostafiz & Rabia Najaf, 2021. "Fintech firms and banks sustainability: Why cybersecurity risk matters?," International Journal of Financial Engineering (IJFE), World Scientific Publishing Co. Pte. Ltd., vol. 8(02), pages 1-14, June.
    4. Cristina Zeldea, 2021. "Financial Inclusion Disparities in the European Union," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 9(1), pages 82-90, June.
    5. Robert Jeyakumar Nathan & Budi Setiawan & Mac Nhu Quynh, 2022. "Fintech and Financial Health in Vietnam during the COVID-19 Pandemic: In-Depth Descriptive Analysis," JRFM, MDPI, vol. 15(3), pages 1-19, March.
    6. Otilia MANTA, 2018. "Financial Technologies (Fintech), Instruments, Mechanisms And Financial Products," Internal Auditing and Risk Management, Athenaeum University of Bucharest, vol. 52(4), pages 78-102, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jamil, Abd Rahim Md. & Law, Siong Hook & Mohamad Khair-Afham, M.S. & Trinugroho, Irwan, 2023. "Financial inclusion and economic uncertainty in developing countries: The role of digitalisation," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 786-806.
    2. Sant'Anna, Dário A.L.M. & Figueiredo, Paulo N., 2024. "Fintech innovation: Is it beneficial or detrimental to financial inclusion and financial stability? A systematic literature review and research directions," Emerging Markets Review, Elsevier, vol. 60(C).
    3. Simplice A. Asongu & Nicholas M. Odhiambo, 2023. "Female unemployment, mobile money innovations and doing business by females," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-26, December.
    4. Weisong Qiu & Tieqi Wu & Peng Xue, 2022. "Can Mobile Payment Increase Household Income and Mitigate the Lower Income Condition Caused by Health Risks? Evidence from Rural China," IJERPH, MDPI, vol. 19(18), pages 1-15, September.
    5. Simplice A. Asongu & Therese E. Zogo & Mariette C. N. Mete & Barbara D. Mensah, 2024. "Not all that glitters is gold: Financial access, microfinance, and female unemployment in sub‐Saharan Africa," World Affairs, John Wiley & Sons, vol. 187(4), pages 421-436, December.
    6. Bălţoi Ion-Costel-Marius, 2020. "The fintech ecosystem in Romania," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 14(1), pages 273-281, July.
    7. Chia-Nan Wang & Nhat-Luong Nhieu & Wei-Lin Liu, 2024. "Unveiling the landscape of Fintech in ASEAN: assessing development, regulations, and economic implications by decision-making approach," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-16, December.
    8. Kevin Thomas Chacko & Pankaj Kumar Baag, 2021. "Financial Inclusion in India: An approach through FinTech as a solution," Working papers 463, Indian Institute of Management Kozhikode.
    9. Bu, Ya & Du, Xin & Li, Hui & Yu, Xinghui & Wang, Yuting, 2023. "Research on the FinTech risk early warning based on the MS-VAR model: An empirical analysis in China," Global Finance Journal, Elsevier, vol. 58(C).
    10. Fatkhurrohman, 2021. "Access to Fintech and Poverty : Evidence from the Arrival of 4G Networks in Indonesia," Warwick-Monash Economics Student Papers 24, Warwick Monash Economics Student Papers.
    11. Uwem E. Uwah & Joseph O. Udoayang & Peter A. Uklala, 2022. "Post COVID-19 and the Acceptance of Financial Inclusion as a New Normal in Financial Transactions: Implications for Nigerian Accountants and Other Financial Service Providers," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(3), pages 193-214, July.
    12. Swapnilsingh Thakur & Shailesh Rastogi & Neha Parashar & Pracheta Tejasmayee & Jyoti Mehndiratta Kappal, 2023. "The Impact of ICT on the Profitability of Indian Banks: The Moderating Role of NPA," JRFM, MDPI, vol. 16(4), pages 1-16, March.
    13. Duan, Chengyonghui & Ni, Soh Wei, 2024. "Impact of fiscal spending, financial inclusion on financial stability," Finance Research Letters, Elsevier, vol. 69(PB).
    14. PINSHI, Christian P., 2021. "Exploring the usefulness of Fintech in the dark era of COVID-19," MPRA Paper 107863, University Library of Munich, Germany.
    15. Prasad, Eswar, 2021. "New Financial Technologies, Sustainable Development, and the International Monetary System," ADBI Working Papers 1277, Asian Development Bank Institute.
    16. Sugandi, Eric Alexander, 2021. "The COVID-19 Pandemic and Indonesia’s Fintech Markets," ADBI Working Papers 1281, Asian Development Bank Institute.
    17. Chen, S. & Doerr, S. & Frost, J. & Gambacorta, L. & Shin, H.S., 2023. "The fintech gender gap," Journal of Financial Intermediation, Elsevier, vol. 54(C).
    18. Tomasz Siudek & Aldona Zawojska, 2024. "A Theoretical Model of Customer Acceptance and Use of Electronic Banking as a Distribution Channel for Banking Products and Services," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 866-889.
    19. Mr. Boileau Loko & Yuanchen Yang, 2022. "Fintech, Female Employment, and Gender Inequality," IMF Working Papers 2022/108, International Monetary Fund.
    20. Adugna, Hailu, 2024. "Fintech dividend: How would digital financial services impact income inequality across countries?," Technology in Society, Elsevier, vol. 77(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jrisks:v:12:y:2024:i:11:p:178-:d:1518459. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.