DRIVERS OF DIGITAL FINANCIAL ADOPTION: EVIDENCE FROM GLOBAL FINDEX DATA AND IMPLICATIONS FOR ISLAMIC FINTECH

Abstract

In this present paper, we examine the factors driving the adoption of digital finance based on microdata from the 2021 Global Findex database. Internet access, mobile phone possession, education, and income are found to be important determinants of digital finance engagement. Digital monetary service use is correlated to strong digital access and greater education levels. A binary logistic regression model was used to estimate digital finance use, whereas the random forest classification model was able to foretell with an accuracy of 74.3% and a 0.792 ROC-AUC score. Results were found to be robust to tests of the sensitivity of the results to model specifications. The paper combines econometric valuation, predictive modelling, and robustness analysis, offering actionable insights for researchers, financial institutions, fintech service providers, and policymakers aiming to foster digitally inclusive financial systems.