FinTech Adoption and Sustainability Performance: The Role of Digital Financial Literacy and Financial Inclusion in Pakistan's Banking Sector.

Mohsin Raza; Muhammad Amjad Bilal; Allah Bakhsh Khan

doi:10.62270/jirms.v5i4.80

Authors

Mohsin Raza Ph.D Scholar, Department of Management Sciences, TIMES Institute, Multan Pakistan https://orcid.org/0000-0002-7645-8830
Muhammad Amjad Bilal Ph.D Scholar, Department of Management Sciences, TIMES Institute, Multan Pakistan https://orcid.org/0009-0000-4938-1121
Allah Bakhsh Khan Professor, Department of Management Sciences, TIMES Institute, Multan Pakistan https://orcid.org/0009-0009-6738-0259

DOI:

https://doi.org/10.62270/jirms.v5i4.80

Keywords:

FinTech Adoption, Sustainability Performance, Digital Financial Literacy, Financial Inclusion, Banking Sector

Abstract

Purpose - This research aims to focus on the potential prospects for FinTech adoption to enhance sustainable performance through financial literacy and financial inclusion. This study also explores the factors behind FinTech usage and its contribution to achieving sustainable performance, offering valuable implications for stakeholders in the financial institutions, particularly the banking sectors of Pakistan.

Study Design/methodology/approach- The primary data was collected through survey questionnaires from 384 banking professionals across Punjab using convenience sampling. The analysis was conducted using Partial Least Squares Structural Equation Modelling (PLS-SEM) to examine relationships among FinTech adoption, financial literacy, inclusion, and sustainability.

Findings- The empirical findings indicated that FinTech adoption has positive effects on the sustainable performance of the banking sector in Pakistan. In addition, financial inclusion significantly mediates this relationship, while digital financial literacy, despite its positive impact, does not act as a mediator. The results emphasize the need to integrate technological advancements and financial inclusion to achieve sustainability.

Research Implications - This study highlights how FinTech adoption and digital financial literacy jointly enhance financial inclusion and sustainable performance in Pakistan’s banking sector. It offers practical insights into overcoming digital transformation challenges while contributing to economic growth. The research supports emerging markets in leveraging FinTech for building inclusive, resilient financial systems and provides strategic direction for policymakers, bankers, and financial institutions. Theoretically, it contributes to the Technology Acceptance Model and Good Public Theory by emphasizing how technology and knowledge, as public goods, enhance both organizational and individual sustainability outcomes.

Originality/value - Research on FinTech Adoption and Sustainable Performance remains a new topic in academic literature, with the direct impact already well-studied. However, as far as the authors know, no study has looked at how FinTech adoption indirectly affects sustainable performance through digital financial literacy and financial inclusion. This study extends current research to examine the impact of FinTech adoption on sustainable performance while investigating how digital financial literacy might interact with it.

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