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The Impact of Digital Financial Services on Firm's Performance: a Literature Review

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  • Tariq Abbasi
  • Hans Weigand

Abstract

Digital Financial Services continue to expand and replace the delivery of traditional banking services to the customers through innovative technologies to meet the growing complex needs and globalization challenges. These diversified digital products help the organizations (service providers) to improve their firm performance and to remain competitive in the market. It also assists in increasing market share to grow their profitability and improve financial position. There is a growing literature on Digital Financial Services and firm performance. At this point of the development, this paper systemically reviews the existing (within last one decade) amount of literature investigating the impact of DFS on firm performance, analyzes and identifies the research gaps. We identify 39 works that have appeared in a wide range of peer-reviewed scientific journals. We classify the methodologies and approaches that researchers have used to predict the effect of such services on the financial growth and profitability. We observe that despite rapid technological advancement in DFS during the last ten years, Digital Financial Services being the factor affecting firm performance did not get the reasonable attention in academic literature. One of the reason is that almost all the authors limit their research to banking sector while ignoring others particularly mobile network operators (providing branchless banking) and new non-banking entrants. We also notice that newer researchers often ignore past research and investigate the same issues. This study also makes several recommendations and suggest directions for future research in this still emerging field.

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  • Tariq Abbasi & Hans Weigand, 2017. "The Impact of Digital Financial Services on Firm's Performance: a Literature Review," Papers 1705.10294, arXiv.org.
    • Handle: RePEc:arx:papers:1705.10294
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    References listed on IDEAS

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    Cited by:

    1. Santiago Carbó-Valverde & Pedro J. Cuadros-Solas & Francisco Rodríguez-Fernández, 2022. "Entrepreneurial, institutional and financial strategies for FinTech profitability," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-36, December.
    2. A. Irimia-Diéguez & F. Velicia-Martín & M. Aguayo-Camacho, 2023. "Predicting Fintech Innovation Adoption: the Mediator Role of Social Norms and Attitudes," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-23, December.
    3. Iheanachor, Nkemdilim & Umukoro, Immanuel, 2022. "Partnerships in digital financial services: An exploratory study of providers in an emerging market," Journal of Business Research, Elsevier, vol. 152(C), pages 425-435.
    4. Lenka Syrová & Jindřich Špička, 2023. "Exploring the indirect links between enterprise risk management and the financial performance of SMEs," Risk Management, Palgrave Macmillan, vol. 25(1), pages 1-27, March.
    5. Ting Li Liu & Muhammad Mateen Naveed & Sohaib Mustafa & Muhammad Tahir Naveed, 2024. "Analysing the impact of digital technology diffusion on the efficiency and convergence process of the commercial banking industry of Pakistan," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-27, December.
    6. Carla Fernandes & Maria Rosa Borges & Esselina Macome & Jorge Caiado, 2021. "The relationship between Financial Inclusion and Monetary Stability in Mozambique: Analysis based on an Error Correction Model (VECM)," Working Papers Department of Economics 2021/01, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    7. Longbing Cao, 2021. "AI in Finance: Challenges, Techniques and Opportunities," Papers 2107.09051, arXiv.org.
    8. Decai Tang & Wenya Chen & Qian Zhang & Jianqun Zhang, 2023. "Impact of Digital Finance on Green Technology Innovation: The Mediating Effect of Financial Constraints," Sustainability, MDPI, vol. 15(4), pages 1-16, February.

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