FINTECH PAYMENT ADOPTION AND INVESTMENT EFFICIENCY: THE MEDIATING ROLE OF FINANCIAL INNOVATION

Abstract

The advent of financial technologies (FinTech) has revolutionized the banking industry's operations, especially in the areas of payment systems and financial management. Against this backdrop, the current research seeks to explore the link between FinTech payment adoption and investment efficiency, and to explore the role of financial innovation as a mediator. By integrating insights from recent technology adoption and financial management theories, the study aims to offer a comprehensive view of the role of digital payments in enhancing resource allocation and investment efficiency in banks. The study adopted a quantitative approach and gathered data from 279 banking sector employees. Participants were managers and operational employees who have direct or indirect contact with digital financial services. The study employed structured questionnaires to operationalize the constructs, and the data were analyzed using structural equation modelling (SEM) to examine direct and indirect effects. The results show that the adoption of FinTech payments has a positive impact on investment efficiency, suggesting that the use of digital payment technologies improves financial transparency, lowers transaction costs and facilitates timely investment decisions. Additionally, financial innovation was identified as a critical mediator, implying that the positive impact of FinTech adoption is enhanced when banks engage in financial innovation. The results show that all the proposed relationships were significant, thus offering strong empirical evidence for the model.